Nvidia-led AI stocks slide as inflation data, governance concerns rattle tech

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Nvidia-led AI stocks slide

Highlights

Nvidia drops 6.5%, set to lose over $470 billion in market value across two sessions amid leadership and internal investigation concerns.
U.S. inflation surprise drives expectations for a Federal Reserve rate hike, sparking broad tech selloff as Nasdaq Composite falls 1% on Tuesday.
GE Vernova declines over 6% after SoftBank revises U.S. data center plans, fueling investor unease on AI infrastructure project funding and listings like Nscale’s $35 billion IPO.

Market pressure builds across AI names

As reported by Reuters, selling in technology stocks is intensifying on Tuesday as a stronger-than-expected U.S. inflation report raises expectations that the Federal Reserve will increase rates again next month, adding to pressure on AI-related shares.

Nvidia is down 6.5%, putting the chipmaker on track to lose more than $470 billion in market value over two sessions as concerns mount over fallout tied to Chief Executive Jensen Huang and an internal investigation. The company is also facing added complexity around the development of an Ohio data center.

The Nasdaq Composite is off 1% in afternoon trading. Over the past month, the index has fallen by 1% or more eight times and risen by 1% or more six times, underscoring the sharper swings affecting technology stocks this fall.

Other major decliners include Dell Technologies, down 4.8% on the day but still up 161% for the year, and Sandisk, down 4.5% on Tuesday while remaining up 257% year to date, according to LSEG data.

Among smaller AI infrastructure groups, Iren drops 10%, Nebius falls 7% and CoreWeave slides 3%. All three are down at least 40% since the Nasdaq reached its latest high on October 6, with investors concerned about their ability to raise funds in tighter market conditions.

Investors focus on earnings and sector outlook

Despite the broad selloff, several investors still describe the weakness in leading AI companies as a buying opportunity rather than a break in the sector's longer-term growth case. Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York, says there is concern about Nvidia leadership risk, but adds that he does not see the company "falling apart."

Investors are also watching a series of fresh developments across the sector. British cloud services provider Nscale is considering delaying a $35 billion stock market listing, The Telegraph reports, while GE Vernova falls more than 6% after SoftBank revises equipment procurement plans for its U.S. data center projects.

GE Vernova is among the companies involved in the development of SoftBank's gas-fired power plant and data center project in Pike County, Ohio, according to analysts. The move adds to unease around the pace and scale of AI infrastructure investment as financing conditions tighten.

Even so, market participants remain focused on upcoming catalysts, particularly Nvidia's earnings report due after the close a week from Tuesday and Anthropic's expected IPO in the days after. Jason Ware, chief investment officer at Albion Financial Group, says the main signal for stocks over coming weeks and months is likely to be earnings, with short-term volatility seen as noise unless recession risks or a major shift in AI capital spending emerge.

As noted in our earlier article, AI data center financing risks are rising amid costly capital, delays, and power constraints in the U.S. buildout.

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