BREAKING: NVIDIA recorded the largest one-day drop in history

NVIDIA closed down by 9.5% and erased $278 billion in market value on Tuesday

September 03, 2024

On Thursday paid subscribers received NVIDIA’s Fiscal Q2 2025 earnings analysis concluding:

“Perhaps if you are not a diversified long-term investor or you believe the company will be a market leader for years that could be a good moment to exit from the stock. Especially, because retail investors are now all-in.”

It turns out, the timing for writing this was perfect.

On Tuesday, after the long weekend in the US, NVIDIA ended the session down by 9.5% erasing a whopping $278 billion in market value. This is the biggest one-day decline in market cap on record. Previously, the largest was in February 2022 when Meta fell by $251 billion.

Since releasing its earnings on Wednesday, the chipmaker's stock has dropped by 14% and is down by 18% over the past week.

In effect, the semiconductor sector fell by 7.1%, marking the largest 1-day drop since the March 2020 COVID crash.

Finally, the major indices posted 2-3% declines with VIX spiking by 33%.

Interestingly, after the market close, news came out that NVIDIA has received a subpoena from the U.S. Department of Justice as the regulator seeks evidence that the chipmarker violated antitrust laws. Nvidia shares are down another 2.6% in the after-market hours trading following the news.

In summary, it's going to be a tough month for stocks as it used to be in the past.

At the same time, the sentiment among households is euphoric (see the 'chart of the week' below).

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