Nvidia stock didn’t just slip Monday. It fell off a cliff in the final stretch of trading, closing down $10.33, or 4.99%, at $196.51 — the chipmaker’s steepest single-day drop since February, according to TradingKey.
The sell-off wiped out roughly $260 billion in market value for the company, which still closed the session as one of the largest companies in the world by market capitalization. Shares touched an intraday low of $195.44 before recovering slightly into the close, per TradingKey’s data.
Nvidia Stock Today: What Drove the Decline
The move traces back to a weekend of eye-popping AI investment announcements. Nvidia and South Korea’s SK Group unveiled an AI partnership worth more than $500 billion, according to Yahoo Finance. The deal locks in HBM4 memory supply from SK Hynix and commits SK Telecom to building a 2-gigawatt data center powered by Nvidia’s upcoming Vera Rubin chips.
That announcement landed alongside separate reports that Nvidia is in talks to guarantee up to $250 billion in financing tied to OpenAI’s data center buildout, a deal 24/7 Wall St. reports originated in a Wall Street Journal account of the arrangement. Combined, investors were confronted with over $750 billion in fresh AI commitments in a single weekend.
That’s a lot of money for the market to price in overnight, and it reignited a worry that’s been simmering under the AI trade for months: circular financing. The concern, as Yahoo Finance lays out, is that many of the companies Nvidia is investing in or backstopping are themselves core buyers of Nvidia’s chips — a loop that can inflate demand signals if the underlying AI spending doesn’t generate matching revenue.
The size of the deals was enough to draw a pointed reaction from investors watching the credit angle. Michael Burry, the investor known for his early call on the 2008 housing crash, posted a three-word reaction on X: “Around and around we go” — @michaeljburry.
Nvidia’s five-year credit default swaps, a market gauge of how expensive it is to insure against the company’s debt defaulting, also jumped on the news, a signal traders are pricing in more risk around the buildout even though Nvidia’s underlying business remains highly profitable.
How the Broader Market Held Up
Nvidia’s slide was steep enough to drag the Nasdaq Composite lower even as the rest of the market mostly shrugged it off. The tech-heavy index closed down 0.18% at 24,932.08, according to The Washington Post.
The S&P 500 barely moved, adding just 0.02% to close at 7,413.18 and snapping a four-session losing streak, per The Motley Fool. The Dow Jones Industrial Average, which has less semiconductor exposure, rose 0.51%, or 262.83 points, to 52,210.08, helped by falling oil prices after the U.S. and Iran paused military attacks over the weekend.
| Index | Close | Change | % Change |
|---|---|---|---|
| Dow Jones Industrial Average | 52,210.08 | +262.83 | +0.51% |
| S&P 500 | 7,413.18 | +1.20 | +0.02% |
| Nasdaq Composite | 24,932.08 | -44.90 | -0.18% |
| Nvidia (NVDA) | $196.51 | -$10.33 | -4.99% |
The chip sector broadly took the brunt of the damage. The VanEck Semiconductor ETF (SMH) lost more than 2%, adding to Friday’s losses, CNBC reports. AMD dropped 5% and Teradyne fell 4%, while Micron shed about 2%.
What Comes Next
The pressure on chipmakers hasn’t let up overnight. Nasdaq 100 futures slid 0.9% early Tuesday as the semiconductor rout extended into Asian trading, with SK Hynix and Samsung Electronics both tumbling more than 10% in Seoul, according to Bloomberg.
Investors now shift attention to a heavy earnings week. Microsoft, Meta, Apple and Amazon are all due to report, and each is expected to detail further increases in AI-related capital spending. Any sign of a pullback in that spending, analysts note, would ripple directly into chipmakers like Nvidia that supply the underlying hardware.
The timing adds another layer of uncertainty: the Federal Reserve’s next rate decision lands just two days after Monday’s sell-off, with markets pricing a majority chance that rates hold steady this week.
