Nvidia's stock slide puts Apple and Microsoft back on top

The NVIDIA stock market is being displayed on a smartphonePhoto: Jonathan Raa/NurPhoto (Getty Images)

Nvidia’s stock price hit record highs last week, putting it ahead of Microsoft and Apple as the most valuable company (by market capitalization) in the world. But that victory may have been short-lived.

Now the AI chipmaker’s shares are sinking back toward Earth, falling 6.7% Monday to around $118 and dragging down the Nasdaq. At its peak on June 20, Nvidia stock hit $140.76, putting its market cap at nearly $3.5 trillion. At market close on Monday, its market cap sank to $2.9 trillion, putting it just behind Microsoft’s $3.3 trillion and Apple’s $3.2 trillion.

Nvidia provides powerful computing chips, also known as semiconductors, called GPUs to Big Tech companies looking to develop cutting edge generative artificial intelligence software. Nvidia’s stock rally has been so impressive that it’s had investors wondering if it’s a bubble that will burst if AI hype subsides. Nvidia shares have risen more than 190% over the past year, and 30% over the last three months alone. CEO Jensen Huang is cashing in on the company’s gains, reportedly selling shares worth a total of about $95 million between June 13 and June 21.

The slight decline Monday is an indication that Nvidia’s seemingly-unlimited rally might have hit a peak. But such signals have proven false before. Nvidia’s share price fell before its fourth quarter earnings report in February, as investors grew skeptical that the company could meet Wall Street’s growing expectations. And of course, Nvidia proved its doubters very wrong, and its stock skyrocketed. Nvidia’s stock price also dipped after a big rally following its record-high first quarter earnings in May. But just after the stock seemingly fell back to Earth, it began climbing to new heights — again.

Since almost any good Nvidia news sends the stock up, Nvidia could beat its rivals for the world’s most valuable company again in the near future, even if it’s only for a few days. That also depends on how Apple and Microsoft fare. Apple’s stock remained steady Monday even after news that it’s being charged by antitrust regulators in the European Union for allegedly violating its Digital Markets Act. The company’s stock is up 12% from last year. Meanwhile, Microsoft’s AI push has sent its shares up nearly triple that amount (34%) since June 2023.