Nvidia Shares Tank Over 9%, Suffer Record $279 Billion Market Value Loss

Three-Day Decline Following Earnings Report

Nvidia's recent struggles began after it reported quarterly earnings that failed to meet the high expectations set by investors. The company's stock has now fallen 14% over the past three sessions, erasing some of the massive gains it had accumulated earlier this year. At its peak in July 2024, Nvidia's stock price had nearly tripled, contributing to a year-to-date (YTD) gain of 118% despite the recent losses.

Record Market Value Loss

The $279 billion loss in market value is not only significant for Nvidia but also sets a new record for the largest one-day market capitalization decline for a U.S. company. This surpasses the previous record set by Facebook-owner Meta Platforms, which lost $232 billion on February 3, 2022, after issuing a disappointing forecast.

Nvidia's Valuations and Broader Market Impact

Despite the sharp decline in share price, analysts have raised their estimates for Nvidia's annual net income through January 2025 to $70.35 billion, up from $68 billion before last week's earnings report. This adjustment places Nvidia's current trading at 34 times expected earnings, down from over 40 in June but still in line with its two-year average.

The impact of Nvidia's plunge was felt across the broader market, with other technology stocks also seeing significant declines. The PHLX chip index dropped by 7.75%, its largest one-day decline since 2020, as investors reacted to both Nvidia's earnings miss and tepid economic data.