Nvidia Corporation (NASDAQ:NVDA) experienced a significant downturn last week, with shares falling 8.6% to close at $192.53 on Friday. This sharp decline erased approximately $443 billion in equity value, marking the chip sector's worst weekly performance since early April. The selloff has cast a spotlight on Nvidia's substantial equity investment portfolio, which now stands at $74 billion and poses additional risks to the company's quarterly financials.
Over the course of last week, Nvidia's stock dropped each regular trading session, starting at $208.65 on Monday and ending at $192.53 by Friday. This represents a 7.7% decline from the prior week's close of $208.65. Using Nvidia's latest diluted share count of 24.391 billion, the week's losses translated to roughly $443 billion in market capitalization destruction. The stock now sits 18.6% below its 52-week high of $236.54, reached on May 14.
The broader market also felt the pressure, though to a lesser extent. The S&P 500 fell 2.05% last week, while the Nasdaq Composite dropped 4.7%. The PHLX Semiconductor Index tumbled 7.9%, its worst weekly showing since early April. 'The capex story is not going away,' said David Stubbs, chief investment strategist at AlphaCore Wealth Advisory. B. Riley Wealth's Art Hogan noted that pressure in memory supply is bringing 'renewed inflationary pressure,' as reported by Reuters.
Nvidia's equity investment holdings have grown significantly, according to its most recent 10-Q filing. Marketable equity securities stood at $30.2 billion as of April 26, up from $12.9 billion on January 25. Non-marketable equity securities totaled $42.3 billion, with an additional $1.0 billion in infrastructure-fund investments. The company reported net gains of $15.9 billion from equity securities in the first quarter. However, the filing warns that a 10% decline in publicly held equity securities would reduce their fair value by $3.9 billion.
While the $74 billion equity book is relatively small compared to Nvidia's overall market capitalization, it is substantial relative to the company's income. This introduces a new element of volatility for shareholders, as declines in AI-related public and private holdings could amplify losses during market downturns.
Despite the recent selloff, Nvidia's underlying business remains robust. The company reported first-quarter fiscal 2027 revenue of $81.6 billion, up 85% year-over-year. Data-center revenue reached $75.2 billion, a 92% increase. For the second quarter, Nvidia guided revenue of $91.0 billion, plus or minus 2%, with the guidance assuming no data-center compute revenue from China. CEO Jensen Huang described the AI buildout as 'the largest infrastructure expansion in human history,' as reported by NVIDIA Newsroom.
Export controls remained a quiet but persistent issue. On Friday, Malaysia's customs announced the seizure of 72 server units containing advanced AI chips, valued at approximately 52.9 million ringgit ($12.93 million), at Kuala Lumpur International Airport. Reuters did not specify whether the chips were from Nvidia. The report also noted that Malaysia last year found no evidence of illicit trade in servers with Nvidia chips following an investigation.
Looking ahead, markets face a shortened trading week due to the Independence Day holiday on Friday. The Nasdaq will operate normal hours, 9:30 a.m. to 4:00 p.m. Eastern, Monday through Thursday. The June U.S. Employment Situation report is scheduled for release on Thursday at 8:30 a.m. ET, according to the Bureau of Labor Statistics. This data will be closely watched by Nvidia and other AI-focused names, as last week's May PCE reading of 4.1% kept interest rate pressure elevated.
Nvidia shares begin the new week under the $200 mark, having closed the last three sessions below that threshold. If the stock declines to around $189.23, it would represent a 20% slide from its May 14 high, meeting the technical definition of a correction.
