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What you need to know
- Nvidia’s shares dropped more than 8% on Monday, entering bear market territory.
- The company's latest quarterly financial results raised questions about what was next for the stock—and the AI trade—and uncertainty driven by US trade policy has further concerned investors.
- AI shares are not spared the fall, as most markets have fallen.
AI is still a flop.
Nvidia stock (NVDA) plunged Monday into bear-market territory as equities tumbled following President Trump’s confirmation of plans to impose a tariff of 25% on Canadian imports and Mexican exports beginning tomorrow.
Nvidia shares fell 8.7% Monday. This continued a period of volatility that began after the earnings announcement on Wednesday. Nvidia’s shares are now trading at a price that is more than 20 percent below their January high.
Nvidia exceeded earnings expectations last week. However, its rapid rise to $3 trillion in valuation meant that the chipmaker had little room for disappointment. Last week, investors were alarmed by shrinking margins. This led them to dump semiconductor and AI stock.
Nvidia’s stock continued to fall on Monday. Broadcom (AVGO), a chipmaker that is also scheduled to announce earnings Thursday, followed Nvidia in the downward trend. Super Micro Computer’s (SMCI), a manufacturer of AI servers fell 13% in value, while nuclear energy providers Constellation Energy(CEG)and Vistra(VST) both saw their shares fall more than 7%.
Only a few AI stocks were spared. AppLovin, which surged 700% in revenue last year due to AI, has risen 3.6%. This is a slight rebound from the short seller reports last week that sank its stock.
Wall Street’s recent bullishness was tempered by the uncertainty surrounding the U.S. economic outlook and AI’s business. The inflation rate has been higher than anticipated, while consumer confidence is down due to concerns over the effects of Trump’s trade policies.
In January, the release of DeepSeek’s R1 reasoning system, in which developers claimed it could rival the best U.S. models for a fraction the price, brought new uncertainty to the AI market. AI infrastructure stocks—the chipmakers, server makers, and energy providers who have benefited from the build-out of AI data center capacity—plummeted on concerns that DeepSeek’s efficiency would undercut spending.
Cloud providers have since then remained steadfast in their commitment to invest aggressively in AI. These commitments have not, however, reignited an AI rally.
Update—Monday, March 3: This story has been updated with closing stock price data.
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