Nvidia shares have fallen 30% from a record high set about a month ago, and the company has lost its position as the world's most valuable. The stock has rebounded after several sharp pullbacks over the past five years, but this decline also comes amid controversy involving CEO Jensen Huang. The outcome remains uncertain, making it difficult to treat the selloff as a routine retreat in market sentiment.
Data-center spending remains central to Nvidia's growth
The rise of generative AI has transformed Nvidia from a chipmaker best known for gaming and cryptocurrency-mining graphics cards into a key supplier of AI computing infrastructure. Its GPUs and related technology are widely used to train and run AI models, making data-center construction an important driver of the company's growth.
Technology companies including Alphabet continue to invest in AI and data centers. At SpaceX's most recent earnings call, CEO Elon Musk said the company would use dedicated Nvidia products and described the Vera Rubin architecture as the best. SpaceX has also committed to funding a record-sized GPU financing deal. Under its plans to use dedicated Nvidia GPUs, that spending would go toward Nvidia products.
Such investment can translate directly into orders for Nvidia, but it also leaves the company sensitive to purchasing plans at large cloud providers, specialist cloud companies and other technology firms. If data-center construction slows, customers could adjust chip orders, potentially changing growth expectations.
Sector weakness coincides with company-specific concerns
Technology stocks came under pressure during the week covered in the article. As markets assessed the results of the U.S. midterm elections, the S&P 500 fell 2.6% from Wednesday, while the tech-heavy Nasdaq Composite dropped 3.1%. Investors were concerned that the incoming Congress could take a more cautious approach to AI. Some newly elected governors have also said they plan to pause local data-center expansions until state legislatures establish stricter safeguards and regulations.
Nvidia's recent weakness is not solely a reflection of the broader sector pullback. Huang has acknowledged having an extramarital relationship with a woman who is under investigation on suspicion of acting as an agent for China. Nvidia and the FBI are both investigating the matter. The inquiries are ongoing, and their potential effects on the company's operations, governance and investor sentiment are not yet clear.
Nvidia rebounded after four major pullbacks
Nvidia has had at least five drawdowns of 20% or more over the past five years, including the current one. After each of the previous four, the share price subsequently rose from its drawdown low, either over the following year or by the period covered in the figures:
- November 19, 2021 to October 14, 2022: a maximum decline of 66%, followed by a 305% gain over the next 12 months.
- June 18 to August 7, 2024: a maximum decline of 27%, followed by an 83% gain over the next 12 months.
- January 6 to April 4, 2025: a maximum decline of 37%, followed by an 88% gain over the next 12 months.
- October 29, 2025 to March 30, 2026: a maximum decline of 20%, followed by a 13% gain.
The historical figures show that Nvidia recovered sharply after several deep selloffs, and its shares gained more than 500% cumulatively over the past five years. But past performance does not establish where the current decline will bottom or when a rebound might occur. The investigation involving Huang is still underway, and its effects have yet to become clear, so the earlier share-price moves are only historical context.
High growth forecasts put customer orders in focus
At 3:23 p.m. Eastern time on November 10, 2026, Nvidia shares traded at $168.43, down 5.73% on the day. Wall Street expects the company's sales to grow 90% this year and 68% next year. If data-center construction is constrained, hyperscalers, specialist cloud providers and other technology companies could reduce purchases, leaving next year's revenue growth below expectations.
Nvidia remains one of the main suppliers considered by large data-center operators buying AI chips. Investors will be watching for changes in customer capital spending and orders, as well as developments in the investigation involving Huang. The share-price decline alone does not establish that the company's growth outlook has changed.