Nvidia Has Lost Nearly $1.4 Trillion Since Its October Record as AI Stocks Face a Fresh Rout

Nvidia has lost nearly $1.4 trillion in market value since its October record, as a 9.26% plunge on Thursday, 5 November, wiped approximately $448 billion from its valuation in a single session. The sell-off spread across semiconductor and technology stocks, intensifying concerns about the sustainability of the artificial intelligence boom.

Nvidia shares closed at $181.60, valuing the company at approximately $4.39 trillion, compared with its record $5.78 trillion valuation on 6 October. The stock has fallen roughly 24% since then, recorded its worst daily performance since the DeepSeek-driven turmoil in January 2025, and slipped below its 200-day moving average. The decline has also left Nvidia facing its fifth consecutive losing week, an unusual run for the chipmaker.

Chip Stocks Suffer a Wider Rout

The sell-off extended across the semiconductor industry. AMD and Micron suffered double-digit losses, while Arm also recorded a substantial decline. Broadcom and Taiwan Semiconductor fell around 10%, while Sandisk plunged approximately 22%. The PHLX Semiconductor Index dropped approximately 12%, while the Nasdaq Composite fell 5.5%, entering correction territory. The S&P 500 also declined 4.4%.

Qualcomm added to the pressure after reporting disappointing smartphone chip sales, sending its shares down 9.5%. The widespread losses reflect concerns about technology valuations and whether massive investments in AI infrastructure will generate sufficient returns. Nvidia supplies graphics processing units (GPUs) used to train and operate AI models, making its prospects closely tied to data centre demand. Investors are increasingly questioning whether spending on computing facilities can continue at its current pace while delivering sustainable profits.

AI Spending Faces Growing Scrutiny

Investors are increasingly questioning whether massive AI infrastructure investments will generate sufficient returns to justify current valuations. Major technology companies have committed billions of dollars to building data centres, purchasing advanced processors, and expanding computing capacity to support increasingly sophisticated AI models. However, concerns remain over how quickly this spending will translate into higher revenues and sustainable profits.

Any cuts to expansion budgets or delays in infrastructure projects could weaken future demand for Nvidia's chips. Investors are also assessing whether AI-related valuations have outpaced the earnings these businesses can realistically deliver. The high costs of developing and operating data centres, including electricity, equipment, and maintenance, add further uncertainty. If companies struggle to generate adequate returns from their AI investments, they may become more cautious about future spending, potentially affecting the wider semiconductor industry.

Washington Adds to Investor Concerns

Political uncertainty has added another challenge for the AI industry. Democrats secured victories in the 3 November midterm elections that gave them control of both chambers of Congress, potentially increasing scrutiny of data centre development. These facilities have faced criticism over electricity consumption, pressure on local power supplies, and the costs of expanding energy infrastructure.

The proposed Ratepayer Protection Act highlighted these concerns. It sought to make large data centre operators responsible for more of the electricity infrastructure costs associated with their facilities, but was blocked in a 57-43 Senate vote on 30 September. Greater congressional oversight could create additional challenges for future projects, although no immediate restrictions on Nvidia's existing business have been established.

What Nvidia's Losing Streak Could Mean

Nvidia has recorded at least 12 losing streaks of five or more weeks since its 1999 listing. Its longest lasted seven weeks in 2008. In October 2022, a losing streak ended shortly before ChatGPT launched, after which Nvidia shares rose roughly fourfold over the following year.

However, recoveries are not guaranteed. Shares were higher a year after only eight of the 12 losing streaks, while the stock lost nearly two-thirds of its value in 2002. History offers no clear prediction as investors weigh AI demand against spending concerns and market volatility.