Nvidia’s share price dropped nearly 17 percent on Monday, as the release of DeepSeek-R1 – a Chinese AI model that requires less of Nvidia’s expensive hardware to train – sparked fear among investors. The sell-off shaved $589 billion off Nvidia’s market capitalization, stripping the company of the unofficial “world’s most valuable company” title, which it had taken from Apple as recently as last week. Following Monday’s rout, Nvidia was valued at $2.9 trillion, while Apple regained the top spot with a $3.5 trillion valuation.
Apple was one of the few tech companies to survive Monday’s sell-off unscathed, as the tech-heavy Nasdaq Composite dropped 3.1 percent amid a market panic that affected the entire AI sector, but chipmakers in particular. As the sector’s poster child and the company most vulnerable to potentially more efficient AI models, Nvidia was at the center of the market rout, suffering not only its worst daily percentage loss since the start of the pandemic in March 2020, but also the largest single-day loss in stock market history.
By shedding nearly $589 billion in a single day, Nvidia flew past its own record set last fall, when the company lost $279 billion in market capitalization after analysts had questioned whether the billions of dollars that companies invested in AI capabilities were justified and could be recouped. Nvidia is one of only three companies to suffer single-day market cap losses of more than $200 billion, with Meta and Amazon the other two. As opposed to these two, who were both punished for giving disappointing revenue/profit guidance in February and April 2022, respectively, Nvidia has been subject to such massive movements several times already.
As our chart, based on calculations from Yahoo Finance, shows, Nvidia dominates the list of the largest single-day losses, with all of its seven (!) $200+ billion market cap declines having happened in the past year. The wild swings Nvidia’s share price saw over the past 12 months are a testament to the nervousness among investors, who are constantly torn between profit taking and staying aboard the AI hype train, as fears of the bubble bursting have come to light at the tiniest sign of trouble.
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