--- title: "AI Industry Trembles as Nvidia’s Stock Nosedives" description: "Shares of AI chipmaker Nvidia dropped by nearly three percent in early trading and is down almost five percent in the past week." date: "2025-08-20" modified: "2025-08-20" authors: - name: "Victor Tangermann" job_title: "Senior Editor" link: "https://futurism.com/authors/victor" url: "https://futurism.com/ai-industry-nvidia-stock" categories: - "Artificial Intelligence" tags: - "artificial intelligence" - "NVIDIA" - "OpenAI" - "palantir" --- # AI Industry Trembles as Nvidia’s Stock Nosedives ![Shares of AI chipmaker Nvidia dropped by nearly three percent in early trading and is down almost five percent in the past week.]() *\Image: Johannes Neudecker/picture alliance via Getty Images\* Shares of AI chipmaker Nvidia plunged on Wednesday, dropping by more than three percent in early trading — for a total slide of over five percent in the past week. Other major AI players fell as well, including Google, Meta, and Tesla. AI software company Palantir's stock fell by nearly nine percent this morning. Nvidia is particularly interesting, though, because while those other companies mainly produce software, Nvidia has been making bank by selling the hardware powering the AI industry's explosive ascent. If the AI industry is a gold rush, then [Nvidia is selling shovels]() — and when the shovel seller starts to struggle, everybody gets nervous. Analysts were left perplexed by the selloff, casting around for specific causes. Could muted enthusiasm and AI data center Coreweave's [38 percent collapse post Q2 earnings]() be coming after the AI industry's top performers? Nvidia's shares fell after [*Reuters* reported]() that the firm was working on a new generation AI chip for the Chinese market, which could potentially outperform its H20 workhorse. There are also certain signs of internal shakiness, with CEO Jensen Huang recently 150,000 shares for tens of millions of dollars last week. However, [the sale was planned in March](), and was triggered by hitting predetermined parameters, such as price and volume. In other words, it's not entirely clear what's causing the selloff. Nvidia and its ilk are still up considerably if you zoom out; both Nvidia and Palantir hit all-time highs earlier this month. Palantir alone rose [more than 150 percent]() since April. Could the latest selloff be a market correction, a reality check in light of some sky-high valuations? There has been considerable talk of the AI industry showing [signs of a dot com era-style bubble](). Even OpenAI CEO Sam Altman himself [acknowledged]() last week that we're in a "phase where investors as a whole are overexcited about AI." How long Nvidia's drop in share price will last remains to be seen. The company's meteoric rise has repeatedly been met by bullish investors buying the dip, sending it to all-time highs. Nvidia will be reporting its second-quarter earnings a week from now. Investors [expect strong Q2 results](), and given enormous sales and continued optimism surrounding AI, it's not a stretch to assume they'll be satisfied. If anything, investors are as optimistic as ever, suggesting that the AI industry's gravy train isn't likely to stop any time soon. "NVDA is now the most under-owned large-cap tech stock," Morgan Stanley analyst Erik Woodring wrote in a note this week, as [quoted by *Yahoo Finance*](). **More on AI:** [*Zuckerberg's Huge AI Push Is Already Crumbling Into Chaos*]() ## Author I've been at Futurism since 2017, where my role has evolved to encompass design, writing, and increasingly editing. I've always been fascinated by space exploration and advanced transportation, which I've leaned into by interviewing luminaries in those fields while closely following the dimensions of policy and regulation that allow next-generation projects to succeed -- or, sometimes, to fail. I'm also keenly interested in the effects of generative AI on society, policies, and democratic institutions, as well as clean energy, physics and biology, and the vagaries of tech leadership. My work for Futurism has been cited by publications including Ars Technica, Gizmodo, PC Magazine, Jalopnik, Fox News, and the New York Post. I spent my childhood living in locations including Manila, the Philippines, and Geneva, Switzerland, attended McGill University, and now live in Toronto, Canada. Before Futurism I worked at AskMen and a small photography studio. In my free time, I'm an avid gardener, foodie, and craft beer lover, as well as a maker of artisanal hot pepper sauces. I have a magnificent dog named Freida. ### Author social links [Bluesky]()