Jensen Huang, the CEO and co-founder of Nvidia saw his net worth shrink by $9.8 billion on Tuesday. His net worth now stands at $94.6 billion, according to Forbes’ estimates as of early Wednesday. This huge loss in wealth caused Jensen Huang to drop from the 14th to the 16th position on Forbes’ Real-Time Billionaires list placing him below Michael Dell and Jim Walton.
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The cause of Jensen Huang’s financial loss was a 9.5% drop in Nvidia’s share price on Tuesday, closing the day at $108 per share. This decline erased $279 billion from Nvidia’s market capitalization, the largest single-day market value loss ever recorded for a US company.
Following the close of regular trading hours Nvidia’s stock continued to fall dropping an additional 2.4% in after-hours trading, which brought the stock price down to $105.80.
Contributing to the stock’s decline was a Bloomberg report indicating that Nvidia had received subpoenas from the DOJ as part of an antitrust probe.
The DOJ’s investigation is reportedly focused on concerns that Nvidia may be making it difficult for its customers to switch to chips made by other companies.
Although the DOJ has not yet filed a formal complaint against Nvidia, the issuance of subpoenas suggests that the agency is moving closer to taking legal action.
Nvidia reported record sales of $30 billion for its second fiscal quarter, which ended in July surpassing analyst expectations of $28.6 billion.
For the third fiscal quarter Nvidia has forecasted revenue of $32.5 billion, plus or minus 2%, slightly above average analyst estimates.
Nvidia experienced the largest single-day loss in market value ever recorded in the history of the stock market. The company’s stock fell by 9.5%, leading to a $279 billion evaporation in market capitalization.
This loss has surpassed and also far exceeded the previous record of $240 billion set by Meta in 2022. To put the enormity of this loss into perspective, only 27 companies globally have a market capitalization equal to or greater than the value Nvidia lost in a single day.
The $279 billion figure eclipses the total market value of major corporations like McDonald’s, Chevron and Pepsi.
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Jensen Huang personally lost $10 billion due to the stock’s decline. This sharp decrease impacted Jensen Huang’s net worth, although he remains a centibillionaire.
Other tech giants like Elon Musk, Mark Zuckerberg and Jeff Bezos also saw billions wiped from their fortunes.
Nvidia stock soared to new heights peaking at a $3.3 trillion valuation on June 18, 2024, the highest ever for any public company. Despite its success Nvidia’s stock has tumbled more than 20% since that peak.
Nvidia’s troubles have had a ripple effect across the tech sector with the Nasdaq Composite Index dropping over 3% on the same day. This decline has extended into trading sessions.
Other companies heavily invested in AI such as Microsoft and TSMC and has also seen declines. Microsoft’s stock has fallen 12% from its peak, while TSMC has plunged 18% since mid-July.
Jensen Huang’s wealth has still seen growth this year. At the start of 2023, Jensen Huang’s net worth was estimated at $21.1 billion. Even after the decline, his fortune has grown by $51 billion so far this year, according to the Bloomberg Billionaires Index.
Nvidia controls about 90% of the AI chip market. Its GPUs are considered indispensable for training large AI models such as OpenAI’s GPT-4.
Some analysts remain bullish on Nvidia. They argue that the company’s current stock decline may present a buying opportunity. Wedbush’s Dan Ives, for example likened Nvidia’s GPUs to the new oil and gold in the IT industry.
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