Nvidia’s Market Cap Drops Following Massive Stock Sell-Off

Despite Nvidia (NVDA) posting a quarterly report that beat earnings expectations by 4.96% and sales by 3.23%, the 19% price decline likely knocked the stock down to earth with beginning of day losses wiping out some $470 billion in market cap.

This sell-off was propelled by a combination of geopolitical, competitive and financial triggers that undermined investor confidence and ignited arguments about the staying power of highly-valued tech stocks, especially in the face of the Trump administration’s trade policies.

And now, a couple of months after Nvidia's market cap hit an all-time high of $3.62 trillion back in November 2024, it has shed $800 million and rests at $2.82 trillion.

President Donald Trump’s announced tariffs on Canada, Mexico and China, delayed until early April, only add to the uncertainties bubbling up in markets. Such a drastic step raises questions about possible disruption in semiconductor supply chains and retaliatory measures—questions that are especially pressing for Nvidia, which depends on a patchwork of production around the world.

Macroeconomic data have made it more complicated. Fourth-quarter 2024 US GDP was revised up to 2.3% as a 4.2% jump in consumer spending pushed the overall figure upward. But inflation has also remained stubbornly high, quashing hopes for interest rate cuts. This combination of robust growth and persistent inflation has put the Fed in a tough spot: stable growth and a healthy jobs market do not warrant further increases in interest rates, but inflation means that expansionary policies are risky.

Growth tech stocks are particularly susceptible to this sort of environment, especially as valuations come back down to earth. Nvidia earnings reached $39.33 billion in quarterly revenues, a 265% return year on year, stimulating Earnings per Share (EPS) of $7.18 and surpassing Wall Street estimates.'

Still, the market was disappointed, feeling that those figures were not enough to justify the high valuations that the Price-to-Earnings ratio was at, above 60 before the report. As long-term factors only serve to destabilize outlooks, selling pressure persists.

Nvidia's stock slump is also due to Chinese rival DeepSeek that made waves after launching AI models at 96% less cost than Western benchmarks. This chipped away at the perception of Nvidia's technological stranglehold in the AI GPU market, which at one point stood at 95% market share.

Despite the recent sell-off, Nvidia is far from dead—at least according to some notable analysts who still see a path upward for the semiconductor star. Investors looking to make sense of Nvidia's valuation can leverage a stock screener to analyze key financial metrics, valuation ratios, and industry comparisons to determine if it remains a buy. By utilizing a stock screener, investors can analyze Nvidia across key financial metrics, valuation ratios, and industry comparisons to determine if it remains a buy. Morgan Stanley forecast sees Nvidia on top of the market—with 60% Compound Annual Growth Rate of AI demand heading into 2030 and NVDA on $10 EPS.

Furthermore, Nvidia's expansion into fields business like automotive and cloud computing provides an overdrive against sector-specific turbulence.