NVIDIA evaporated 430 billion dollars in two days, and Microsoft briefly regained the second position in global market value

NVIDIA's stock price has fallen for the second consecutive trading day, dropping more than 6% at one point on Tuesday, with a market value loss approaching $430 billion over two days.

Data shows that nearly $2 trillion has evaporated from its market value since the historical peak, with a loss of $1.2 trillion in just the past 10 trading days.

On Tuesday, NVIDIA's decline was significantly greater than that of other large tech stocks, becoming an important factor dragging down the performance of tech stocks. Meanwhile, hotter-than-expected CPI data combined with hawkish statements from Federal Reserve officials pushed U.S. Treasury yields sharply higher, further suppressing risk asset sentiment and intensifying pressure on tech stocks.

Microsoft fell 2.2%, Alphabet dropped about 0.4%, Meta closed flat, Apple fell about 0.6%, Tesla rose 0.5%, and Amazon increased by about 1.5%. The S&P 500 index fell about 0.4%, and the Nasdaq 100 index dropped 0.6%. Notably, the Nasdaq 100 index has cumulatively declined about 2% since the election, showing significant pressure on tech stocks overall.

During intraday trading, Microsoft's market value briefly surpassed NVIDIA's, making it the second-largest publicly traded company in the world by market value. However, following Anthropic's release of an office suite, Microsoft's decline widened, falling behind NVIDIA again. NVIDIA's market value has now retreated to a level comparable to that of Apple and Microsoft, significantly narrowing its previous lead.

Shareholders File Class Action Lawsuit, Company Governance Risks Further Escalate

As the stock price comes under pressure, NVIDIA is also facing new legal and governance pressures. A shareholder filed a lawsuit in California on Monday, accusing NVIDIA and CEO Jensen Huang of misleading investors in the disclosure and response to previous related events, seeking compensation for investors who purchased NVIDIA stock during a specific period.

The lawsuit claims that the company and Jensen Huang did not adequately disclose relevant relationships and the risks they might pose, leading investors to buy stocks without fully understanding the situation.

The plaintiff also alleges that the related events could pose significant risks to NVIDIA's reputation and business prospects. The lawsuit is currently in its early stages, and the related allegations have not yet been validated by the court, with NVIDIA yet to make a formal response to the lawsuit.

On Tuesday, negative news surrounding Jensen Huang continued to emerge: NVIDIA's board announced the hiring of an independent law firm to conduct an internal investigation; House Republicans are reportedly considering issuing a subpoena to NVIDIA's CEO for a closed-door briefing; and there are reports that U.S. Secretary of State Rubio briefed Trump on Huang's contacts with relevant individuals; meanwhile, reports indicate that the FBI is investigating Huang's relationships with relevant individuals.

Previously, NVIDIA's board announced the establishment of a committee composed of independent directors and hired external independent legal counsel to investigate reports involving Jensen Huang.

The board stated that there is currently no reason to believe that NVIDIA's national security interests or company secrets have been compromised, but the investigation will review all available information. Jensen Huang expressed support for the investigation and promised full cooperation.

Uncertainty in AI Investment Prospects Combined with Executive Risks, NVIDIA Faces Dual Pressure

In addition to governance concerns triggered by the executive incident, whether AI infrastructure investments can continue to yield sufficient returns remains a core issue of market concern. As a core supplier in the AI computing power supply chain, NVIDIA's stock performance is influenced not only by the company's own operational expectations but also reflects investors' judgments on the entire AI capital expenditure cycle to some extent.

Data shows that on Tuesday, AI-related stocks underperformed the market overall, with emerging cloud computing (NeoClouds) and optical network sectors experiencing the largest declines, while parts of the S&P 500 index excluding AI-related components barely remained flat, indicating that market sell-off pressure is highly concentrated in the AI supply chain.

The Associated Press pointed out that Jensen Huang has led NVIDIA for 33 years, and his personal image is highly intertwined with the company's strategy, operational decisions, and market perception. Therefore, the related investigation has also led investors to begin focusing on management stability and potential succession issues. Predictive market data from Polymarket shows that traders currently assign only a 16% probability to Huang stepping down by the end of the year, with some analysts believing this pricing is too low.

From a market performance perspective, NVIDIA has significantly underperformed other large tech stocks for two consecutive trading days, indicating that investors are reassessing the risks the company faces. A report from Goldman Sachs traders indicates that Tuesday's sell-off was more driven by real fundamental factors, with hedge funds and long-term institutional investors both being net sellers, focusing their selling on the tech and industrial sectors.

In the short term, the progress of the board's investigation, the follow-up on the lawsuit, and management stability will become important variables affecting the stock price; meanwhile, the return prospects of AI infrastructure investments will still determine the market's judgment on NVIDIA's long-term valuation.

Additionally, an article from Wall Street Insights previously stated that Goldman Sachs estimates that programmatic trading strategies (CTA) will sell about $31 billion worth of S&P 500 futures in the next week without considering market direction, which will bring additional technical downward pressure on tech stocks.

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