Nvidia loses about $450 billion as election shock sends AI chip stocks sharply lower

Nvidia shares suffered their steepest one-day percentage decline since the DeepSeek selloff, falling 9.26% and erasing about $450 billion in market value after the midterm elections. The drop came despite strong recent operating results and highlighted a growing concern about the pace of future AI infrastructure spending.

The stock closed at $181.60 after trading between $196.25 and $181.46. Trading volume reached 307,846,650 shares, roughly double the prior session's 149 million. Nvidia fell below its 200-day moving average and recorded its lowest close since April, when it closed at $178.10.

The wider technology market also declined sharply. The PHLX Semiconductor Index fell more than 12%, the Nasdaq dropped 5.52%, and the S&P 500 declined 4.22%. Advanced Micro Devices fell 15.59% in the session and 28.6% over the week, indicating that investors were selling across the AI chip sector rather than targeting Nvidia alone.

Why the market sold Nvidia

The immediate concern was political and regulatory risk. The source material links the selloff to the possibility that a Democratic sweep could bring tougher AI rules and slow the construction of computing facilities.

That matters because Nvidia's sales depend heavily on data centres being built and expanded. Permits, electricity connections and new regulations could delay projects, even if customers continue to prefer Nvidia's hardware.

Peter Boockvar of OnePoint BFG Wealth Partners said stocks connected to the AI expansion would likely fall if that expansion slowed, even while the underlying technology continued to improve. The concern is therefore less about Nvidia's current products and more about the timing and scale of customer orders.

Nvidia reported revenue of $96.22 billion in its latest quarter, an increase of 105.8% from a year earlier. Management guided to $108.0 billion for the current quarter and said it expected approximately 70% revenue growth in fiscal 2028.

Valuation and execution risks

After the decline, Nvidia traded at 15x forward earnings and 23x trailing earnings. Its reported growth makes that forward multiple appear low, but the valuation could become less attractive if analysts reduce earnings estimates.

A slowdown in hyperscaler spending or delays in data-centre permits could reduce projected revenue and profit. In that case, the shares could appear inexpensive only because current estimates have not yet adjusted to weaker demand.

The company also faces exposure to China. Its guidance assumes no compute revenue from China. Roughly 600,000 H200 chips were reportedly sitting in Hong Kong awaiting Beijing's approval, while several large Chinese internet companies had reportedly received about 10,000 units each.

Nvidia has $279 billion in supply commitments, mostly memory for Vera Rubin. Those commitments could become a burden if customer orders weaken. At the same time, analysts remain overwhelmingly positive, with 10 strong-buy ratings, 49 buy ratings, 2 hold ratings and 1 sell rating. That leaves room for target reductions if expectations change.

What investors will watch next

Wall Street's consensus price target is $327.14, which would require a gain of about 80% from the reported closing price. However, price targets may not yet reflect the latest decline or a potential change in customer spending.

Nvidia's earnings are expected after the close on November 17. Investors are likely to focus on data-centre demand, any update on China and whether management maintains its fiscal 2028 outlook.

The earlier DeepSeek shock was different. Nvidia fell 16.97%, from $142.62 to $118.42, on fears that cheaper AI models would require fewer chips. That concern eased as AI usage expanded. A policy-driven slowdown could last longer if regulation or infrastructure delays continue.

Nvidia is down 2.4% this year, while the S&P 500 is up 7.49%. AMD, despite its recent decline, remains up 88.83% this year, giving investors a different risk profile within the AI-chip group.

Conclusion

Nvidia's latest selloff reflects fears that regulation and data-centre delays could weaken future customer spending, not a deterioration in its reported results. The November 17 earnings report will provide the next major test of whether demand remains supply-constrained and whether the fiscal 2028 outlook still holds.

Frequently Asked Questions

Q. How much did Nvidia shares fall?

Nvidia shares fell 9.26% in the session and closed at $181.60.

Q. How much market value did Nvidia lose?

The company lost about $450 billion in market value during the selloff.

Q. Why did investors sell Nvidia shares?

Investors were concerned that tougher AI rules and slower data-centre construction could reduce spending by Nvidia's customers.

Q. How did other AI-chip stocks perform?

Advanced Micro Devices fell 15.59% on the day and 28.6% over the week.

Q. What were Nvidia's latest reported results?

Nvidia reported quarterly revenue of $96.22 billion, up 105.8% from a year earlier, and guided to $108.0 billion for the current quarter.

Q. When is Nvidia expected to report earnings?

Nvidia's earnings are expected after the close on November 17.

Q. What will investors watch in the earnings report?

They will watch data-centre demand, any China update and whether the fiscal 2028 outlook remains unchanged.