Nvidia has been the face of the artificial intelligence boom for three years. On Thursday, it was the face of the selloff. The chipmaker’s shares fell 9.26 percent to close at $181.60, down $18.53 from the previous close of $200.13, as investors dumped the stocks tied to the AI build-out. The Associated Press said Nvidia was the heaviest weight on the S&P 500, and Bloomberg called it the company’s deepest slide since January 2025, one that erased the last of its gains for the year.
The chip index had its worst day since 2020
Nvidia did not fall alone. The Philadelphia Semiconductor Index, the main benchmark for chip stocks, fell 12.25 percent, its biggest one day drop since March 2020. Reuters described the fall as the second biggest on record for the index. Other chip names fell even harder than Nvidia. Reuters reported that Micron, AMD and Marvell each lost about 17 percent, while SanDisk fell 22 percent. The wider market went down with them: the Nasdaq Composite fell 5.52 percent to 24,315.00 and closed in correction territory, and the S&P 500 fell 4.36 percent. The full picture of the session is in our report on the selloff that erased the post-midterm rally.
Why the AI trade cracked
The trigger was politics. Democrats swept this week’s midterm elections, and by Thursday investors were focused on what the new majority could mean for the AI build-out. Reuters reported that the sweep raised fears of tougher scrutiny of AI infrastructure and possible limits on data center construction. The worry has hard numbers behind it: of the 41 data center related ballot measures voted on this week, all but one went against the projects, according to Ballotpedia figures cited by Reuters. The Associated Press described a broad selloff led by stocks tied to the construction of AI data centers. Layered on top was an older concern that never went away, that AI stock prices had climbed far ahead of the profits behind them.
Analysts split on what it means
Strategists quoted by Reuters on Thursday landed in very different places. Adam Sarhan, chief executive of 50 Park Investments, said AI stocks are already in a private bear market that virtually nobody is talking about, and he described the selling as the unwinding of the AI trade. Keith Lerner of Truist pointed to hesitant buyers: “We are now seeing something of a buyers’ strike in tech.” Peter Andersen, founder of Andersen Capital Management, pushed the other way and called the selloff unwarranted, saying investors were reorganizing their thoughts around the election results and what policy changes could follow for AI and data centers.
From a record high to a loss for the year
The speed of the reversal is hard to overstate, and it capped a whiplash week that began with the Dow surging 1,569 points in a post-midterm rally on Wednesday. Nvidia was the first company in history to reach a $5 trillion market value, first crossing that line in October 2025. As recently as October 5 of this year, its shares closed at a record $238.90. Thursday’s close of $181.60 sits about 24 percent below that record, and the stock is now down for the year, at its lowest level since April. The next test comes soon, and it comes from the company itself: Nvidia is scheduled to report its quarterly results on November 17, the first chance for investors to hear directly whether demand for its chips is still growing at the pace the stock price once assumed.
Sources: Reuters and Associated Press market reports, November 5, 2026; closing price data reported by The Motley Fool and Finnhub; analyst comments collected by Reuters.