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World’s most valuable company dethroned as $550bn wiped off Nvidia

Jensen Huang
Jensen Huang became the world's 13th richest person as Nvidia's share price soared - SAM YEH/AFP via Getty Images

Nvidia has lost close to $550bn (£433bn) in a dramatic tumble since being crowned the world’s most valuable company last week.

Shares in the US tech giant, which has become the poster child of the artificial intelligence revolution, fell by almost 7pc on Monday.

This led to its market value sliding to $2.9 trillion, down 16pc from a peak last Thursday.

Nvidia overtook Microsoft and Apple last week to become the world’s most valuable listed company, with a market value of more than $3.4 trillion.

The slide means the company has fallen behind both Microsoft and Apple, and could raise fears that the frenzy around AI has peaked.

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Nvidia’s share price had risen by more than 150pc since the start of the year, sparking concerns about a new bubble fuelled by hype around AI.

Nvidia’s processors, known as GPUs, are crucial to large language models such as OpenAI’s ChatGPT.

These tools have taken Silicon Valley by storm in the last 18 months despite questions over their true impact on productivity.

Nvidia’s profits rose more than sevenfold in its last financial quarter.

Shares were slightly higher in pre-market trading on Tuesday, suggesting the slide may ease off.

Nvidia has accounted for around a third of the S&P 500’s total gains this year, leading to concerns that a downward spiral could send wider stock markets lower.

The sharp drop in Nvidia shares triggered a sell-off in European markets on Tuesday, with the Cac 40 index in Paris down 0.8pc and the Dax in Frankfurt down 1.1pc.

Jim Reid, a Deutsche Bank analyst, said Nvidia “has been driving markets again over the last 24 hours”.

Jensen Huang, Nvidia’s chief executive, has sold almost $95m of shares in the last two weeks, according to stock market filings, although the trades were scheduled months ago as part of a rewards plan.

Nvidia’s rise in recent months has made Mr Huang the world’s 13th richest person with a net worth of $111bn.

Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, said: “It’s too early to call the end of the Nvidia mania but given the high amount of speculation around the stock, we shall see the price action getting worse before it gets better.”