Written by Yang Jianyong

As the strongest stock on the ground, since the latest quarterly financial report was released, it has fluctuated sharply in the capital market. Not only has its market value fallen below $3 trillion, but it also plummeted by 9.5% on Tuesday, with its market value evaporating by $279 billion overnight, setting a record for the largest one-day drop in U.S. stock history, equivalent to evaporating three Intels overnight. Converted to RMB, it is nearly RMB 2 trillion, equivalent to losing a Moutai in one night. 

So, what's wrong with NVIDIA, whose market value has fallen by nearly $300 billion overnight?

First: NVIDIA faces an escalation of antitrust measures

The U.S. Department of Justice has issued subpoenas to NVIDIA and other companies seeking evidence of alleged violations of antitrust laws. This move marks a further escalation of the investigation into NVIDIA.

Second: Whether there is a bubble has also caused controversy

While the capital market has continued to climb, controversy has arisen over whether there is a bubble in this chip giant. Although revenue is driven by large AI models, NVIDIA's AI chips are in short supply, and revenue has doubled, which may have overdrawn performance.

It is important to note that the core buyers of NVIDIA chips are primarily technology giants such as Meta, Google, and Microsoft, which rely on NVIDIA's AI platform to enhance their AI capabilities. To this end, these companies have spent billions of dollars purchasing and stockpiling NVIDIA chips. However, it is unlikely that technology giants will continue to see sustained spikes in spending on AI infrastructure.

As a result, there is significant risk that NVIDIA's performance will not continue to grow at a high rate. In particular, the latest fiscal quarter saw a year-over-year increase in net income of 168%, and a 628% increase compared to the previous fiscal quarter, indicating that high growth is beginning to slow down. Meanwhile, guidance for the next fiscal quarter fell short of optimistic expectations, leading some investors to take profits on the high-flying stock price.

Finally, the release of the next-generation architecture chip has been delayed, and it was originally planned to start shipping in the second fiscal quarter.

The release of the next-generation Blackwell architecture chip has been delayed, and it was originally planned to start shipping in the second fiscal quarter. Earlier, it was reported that the Blackwell series of AI chips had been forced to delay their release due to design defects. It is worth noting that NVIDIA has stated that Blackwell samples are being shipped to their partners and customers.

Despite NVIDIA's strong revenue, it was unable to prevent a significant setback in the market. In the three trading days following the release of its financial report, NVIDIA's market value fell by $431.7 billion (approximately RMB 3 trillion).

It is worth noting that with the rapid development of generative AI technology, NVIDIA is at the core of this significant technological advancement and cannot be separated from NVIDIA's high-performance chips.

In other words, the strength of a company's AI capabilities is ultimately determined by how many NVIDIA GPUs it possesses. At the forefront of the AI revolution, NVIDIA's platform plays a crucial role in AI applications across many fields. As a result, NVIDIA's chips are in high demand and difficult to obtain, driving revenue growth at an exponential rate.

As the potential demand for AI market gradually releases, all industries are experiencing a platform transformation from general-purpose computing to accelerated computing and generative AI, which will also significantly increase the demand for computing power, continuing to release new growth points for chip manufacturers.

Yang Jianyong is a Forbes China contributor, and his opinions expressed are solely his own. He is dedicated to providing in-depth insights into cutting-edge technologies such as the Internet of Things, cloud services, artificial intelligence, and smart homes.