This year, the US stock market has largely been watching NVIDIA's performance.

At the beginning of the year, NVIDIA was only around $1.6 trillion. Watching it rise to $2 trillion and then $3 trillion, it even became the global number one.

Some say this is a huge bubble, because whether comparing horizontally with companies like Apple and Microsoft, which have similar market capitalizations, NVIDIA's performance is significantly weaker. And comparing vertically with Intel, AMD, Qualcomm, etc., it is also significantly overvalued.

But others say it is well-deserved, as with the explosion of AI, everything can be AI in the future. As an AI chip giant, capturing over 90% of the market, supporting such performance is normal, or even underestimated, and it will continue to rise.

However, amidst the ongoing controversy, NVIDIA, the global number one, after briefly becoming the world's most valuable company, its market value began to decline, with a total evaporation of $430 billion in three days.

$430 billion is equivalent to 3.12 trillion yuan, which is equivalent to more than 7 Xiaomi companies and 1.6 Moutai companies. It's quite scary to see such a drop in just three days.

Why did it suddenly drop so harshly? There are many reasons.

Firstly, NVIDIA's CEO Huang Renxun reduced his holdings, which caused many investors to lose confidence. Since June, Huang Renxun has accumulated the sale of over 600,000 shares, cashing out a total of nearly $79.383 million, equivalent to about 580 million yuan.

Compared to a market value of over $3 trillion, the reduction in holdings is not much, but the CEO leading the reduction, especially at such a high level, can significantly impact investor confidence.

Additionally, some believe that the current AI computing power is actually already oversupplied, but it is packaged by NVIDIA to make people unable to clearly recognize it, so it will be difficult to maintain high growth in the future.

There is also the intensifying competition in AI chips, with AMD, Intel, and some startup GPU vendors joining the fray. Additionally, large companies like Google, OpenAI, and Microsoft are also developing their own chips, which will all affect NVIDIA's performance.

Some also believe that the AI industry is overvalued overall, and perhaps the GPT-5.0 released by OpenAI in the future will not bring too many breakthroughs. NVIDIA might face troubles then, and this is a preview of what might happen.

So a combination of these factors has led to NVIDIA's 3 trillion drop in just three days.

Actually, looking at NVIDIA's performance over the years, you will understand that the higher it rises, the harder it may fall in the future. If calculated based on its recent 1-for-10 stock split, in October 2022, it was $11, rising to $50 by the end of 2023, and now surpassing $110. That's more than a 10-fold increase in just over a year.

And if we extend the timeline a bit further, from 2014 to now, in 10 years, the stock price has increased nearly 500 times. That's quite impressive.

And the market value of this thing has to be compared with other companies, whether it's Microsoft, Apple, Google, META, Nvidia, Tesla, Amazon, and so on, Nvidia is clearly overvalued.

So this foam will burst sooner or later, and it is still a little crowded now. I'm afraid it will be more crowded in the future, and we won't be too surprised.