Nvidia shares dropped roughly 2.2-2.4% over July 16-17 after a broader selloff swept through AI-related tech stocks. The decline came just days after the chipmaker briefly touched a $4 trillion market capitalization.
The culprit, according to analysts, is a growing unease about whether hyperscale cloud providers will keep spending at the same breakneck pace on AI infrastructure. Add in escalating competition from Chinese alternatives like Huawei’s Ascend chips, and you’ve got the recipe for a classic profit-taking session.
What spooked investors
CEO Jensen Huang has projected a chip demand backlog exceeding $1 trillion through 2027, with each AI factory potentially costing $100 billion to build.
Chinese competition adds another wrinkle. Huawei’s Ascend platform has been gaining traction as an alternative for organizations that either can’t access Nvidia chips due to US export controls or simply want a second supplier.
