Nvidia shares experienced an unprecedented decline on Monday, plummeting by 17% and resulting in a staggering market cap loss of nearly $600 billion. This dramatic drop marks the largest single-day market cap loss for any U.S. company in history, underscoring the volatility and challenges facing the tech sector.
The substantial financial setback is more than twice the $279 billion drop Nvidia encountered in September, and eclipses the previous record of a $182 billion loss set by Apple in 2020. Nvidia's stock closed at $118.58, marking its worst market performance since March 16, 2020.
The ripple effects of Nvidia's downturn extended beyond its own company, impacting data center firms heavily reliant on its GPUs for hardware sales. Companies such as Dell, Hewlett Packard Enterprise, and Super Micro Computer all saw declines of at least 5.8%. Oracle, a significant player in President Donald Trump's AI initiatives, suffered a 14% drop.
"Shows that the AI race will be very competitive," remarked David Sacks.
The consequences of Nvidia's decline are not only monumental in terms of its market cap but also when compared to other major companies. The loss exceeds the combined market value of tech giants such as Oracle and Netflix, and is more than double the market cap of industry leaders Coca-Cola and Chevron.
In a related development, DeepSeek unveiled a free, open-source large language model developed in just two months with less than $6 million. The model utilized reduced-capability chips from Nvidia, highlighting ongoing innovation despite recent restrictions on U.S. chip exports to China.
"I'm confident in the U.S. but we can't be complacent," added David Sacks.
Nvidia's significant market loss has now positioned it as the third most-valuable public company, trailing behind Apple and Microsoft. This dramatic reshuffling illustrates the intense competitiveness within the technology industry.