NVIDIA lost 3 trillion in three days

The throne of the global market value king has not yet warmed up, but NVIDIA has encountered a sharp pullback.

On June 24th local time, NVIDIA's stock price fell by nearly 6.7%, marking the largest single-day decline in two months. With three consecutive days of decline, its market value has evaporated over $430.6 billion (approximately RMB 31.3 trillion), falling behind Microsoft and Apple again, returning to the third position in the U.S. stock market.

However, the "Yellow Chief's" myth of "wealth creation" will not end here. In the eyes of investors, this may be a phenomenon of "profit-taking" after NVIDIA's stock price "peaked".

In the past year and a half, NVIDIA's total market value has increased tenfold, and over a ten-year period, this number has skyrocketed to an astonishing 500 times. With the stock price at a high point, investors' "locking in gains" and executives' cashing out have put pressure on its stock price.

SEC information shows that from June 13th to 24th, CEO Jensen Huang has sold over 600,000 shares of NVIDIA, cashing out a total of nearly $79.383 million (about RMB 5.8 billion), with an additional 120,000 shares awaiting sale. At the same time, other executives including NVIDIA's CFO and Executive Vice Presidents have also been selling shares.

Data from Washington Service shows that excluding the impact of the 1-for-10 stock split on June 10th, NVIDIA's executives and directors have sold approximately 770,000 shares, cashing out over $700 million (about RMB 5.1 billion); since the release of the first-quarter report at the end of May, over one-third of insiders have sold shares.

Analysts at Renaissance Macro Research predict that this pullback may bring NVIDIA's stock price back to around $110 in early June.

Analysts are concerned that investors may have become fatigued with the AI track in the short term. The delay of GPT-5 until late 2025 to 2026 has also raised concerns among investors about the slowdown in AI technology iteration. If there are signs of a slowdown in technology spending, the market's excessive optimism about AI may quickly disappear.

Zhu Xiaohu, managing director of GSR Ventures, pointed out that whether NVIDIA's market value myth can continue depends on the effectiveness of the Scaling Law. He bluntly stated that if OpenAI's GPT-5.0 does not meet expectations, NVIDIA will face greater turbulence.

The market's concerns are not unfounded. It is worth noting that among the "Big Seven" in the U.S. stock market, NVIDIA has the smallest annual revenue but the highest P/E ratio. Behind the extremely high P/E ratio lies the very high expectations that the capital market has placed on its development. If NVIDIA's future growth shows signs of fatigue, its stock price is bound to fluctuate.

The "Yellow Chief," who has teetered on the brink of bankruptcy several times, understands this truth well. He has sounded the alarm internally, emphasizing that NVIDIA must not rise rapidly like Cisco or Sun Microsystems only to decline rapidly "Huang Jiaozhu" is beginning to try to break through, and one key aspect is to reduce dependence on major clients. UBS analysts speculate that NVIDIA's largest client may be Microsoft, contributing 19% of NVIDIA's revenue in the 2024 fiscal year.

In order to diversify its revenue streams, Huang Renxun is also promoting "national sovereign AI" externally. The intention is for every country to utilize its own infrastructure, data, labor force, and business network to build AI capabilities. It is predicted that this business will bring nearly $10 billion in revenue to NVIDIA this year.

While adjusting demand structures, Huang also needs to deal with changes in competitors and clients. Currently, chip manufacturers such as AMD and Intel have joined the competition to "divide the AI cake"; while major clients of NVIDIA such as Microsoft and Google are developing their own products to try to reduce dependence. They are all preparing to "encircle" NVIDIA.

It can be said that NVIDIA, which has been pushed to its peak by the waves of the times, does not completely control its fate in the capital market.

Although NVIDIA's moat in the field of AI can keep it standing at the top of the market in the short term, investors are more concerned about the profitability of downstream companies in the AI ecosystem. If it is difficult to make consumers pay real money, the logic and support of the AI track will face greater challenges.

Under various troubles, will NVIDIA's myth of a super high market value come to an end? This has become the most concerning topic for investors at the moment. With NVIDIA's recent decline, controversies in the market have further intensified.

Bearish investors believe that NVIDIA's "Cisco moment" is brewing; however, currently, the majority of investors still hold a bullish attitude. Bloomberg data shows that over 90% of analysts recommend buying NVIDIA, with their target price about 12% higher than the current stock price. After this recent pullback, NVIDIA's stock price turned red again at the opening on June 25th, Eastern Time, and returned to an upward channel.

Clearly, in the era of AI, the entire industry ecosystem and market perception are undergoing transformation, and the short-term ups and downs of giants are also normal. For NVIDIA, it needs to quickly adjust its posture and layout according to demand in this AI throne competition to have the possibility of maintaining its position.

The era can both "create gods" and bring them down from their pedestals. Huang Renxun, who has experienced several ups and downs, is working hard to firmly tie NVIDIA to this fast-moving era of AI. After all, this is a major opportunity that he has accumulated over decades