NVIDIA, the leading AI chipmaker globally, has seen a dramatic decline in its market value, falling by around $406 billion this week due to mounting economic concerns in the US. This sharp drop represents roughly 20% of the company's total value over the past two weeks and underscores NVIDIA's heightened volatility, surpassing that of its major competitors in the so-called Magnificent Seven (including Meta, Alphabet, Amazon, and Apple).

NVIDIA’s Volatility Outstrips Bitcoin

In the past month, NVIDIA’s stock has fluctuated between $90.69 and $131.26, with a significant market value loss occurring just on Tuesday. This volatility has pushed its 30-day realized volatility to about 80—four times higher than Microsoft’s, double that of Bitcoin, and greater than meme stocks like Trump Media and Elon Musk’s Tesla.

Factors Behind the Decline

NVIDIA's recent performance marks the worst two-week period for the company in two years, according to Bloomberg data. Contributing factors include a tepid forecast and challenges with the Blackwell chip, which dampened investor sentiment. The situation worsened with subpoenas from the US Justice Department amid an escalating antitrust investigation and a disappointing sales forecast from Broadcom, adding to the negative outlook for chipmakers.

Shares Still Up Despite Recent Drop

Despite the recent slump, NVIDIA’s shares have surged by over 100% in 2024, adding $1.3 trillion in market value. Wall Street analysts remain optimistic about NVIDIA’s future growth potential as businesses continue to invest in AI infrastructure. This positive outlook is supported by key clients—Microsoft, Meta, Alphabet, and Amazon—who together account for more than 40% of NVIDIA’s revenue and have confirmed their spending plans for the coming quarters.

Revenue Exceeds Expectations

Despite market challenges, NVIDIA’s latest financial results have surpassed expectations, with revenue more than doubling and adjusted earnings exceeding predictions. However, the company's revenue forecast did not meet the high end of estimates, leading to some skepticism among investors who had grown accustomed to outstanding reports from NVIDIA. This has raised concerns about the long-term prospects for AI spending.