Nvidia (NVDA) enters the new trading week with significantly diminished market standing after Friday's brutal selloff erased more than $300 billion from its market capitalization. The broader semiconductor sector lost approximately $1.3 trillion in value as a powerful jobs report reignited fears that the Federal Reserve may raise interest rates, sending shockwaves through high-growth technology stocks.
The Nasdaq Composite tumbled 4.2% on Friday, while the S&P 500 fell 2.6%. Nvidia and Broadcom (AVGO) were among the biggest drags on the indices as traders recalibrated expectations for monetary policy. The stock closed at $205.10, down 6.2% from its opening price of $214.53, and has now slipped about 2.9% from its close on May 29.
The selloff was not triggered by any negative news from Nvidia itself. In fact, the company reported record quarterly revenue of $81.6 billion in May, with its Data Center division—the core of its AI infrastructure business—posting an all-time high of $75.2 billion. Nvidia also issued strong guidance for the second quarter, forecasting revenue of $91.0 billion, plus or minus 2%.
Market strategists described the move as a long-overdue correction in an overheated sector. “The dam just broke today” after an extended equity rally, said Ryan Detrick, chief market strategist at Carson Group. Ohsung Kwon, chief equity strategist at Wells Fargo, characterized semiconductors as “way overbought” but added, “I don’t think it’s the end of the semi bull market.”
Competitive dynamics are shifting. Broadcom and Marvell Technology (MRVL) are both developing custom chips for cloud-computing clients, a segment gaining traction as major tech firms seek alternatives to Nvidia’s expensive and scarce AI processors. Marvell’s inclusion in the S&P 500 underscores how the AI hardware landscape is reshaping index composition.
Looking ahead, Nvidia and South Korea’s SK Hynix are set to announce a cooperation plan in Seoul before the U.S. market opens on Monday. SK Chairman Chey Tae-won and Nvidia CEO Jensen Huang will brief the media on a project that could involve AI supercomputers, CPUs, PCs, and robotics. Huang noted that memory shortages could persist for “several years.”
The coming week is packed with events beyond Nvidia. SpaceX is expected to price its IPO on June 11 and begin trading on the Nasdaq the following day. Oracle (ORCL) and Adobe (ADBE) are also scheduled to report earnings, providing additional catalysts for the tech sector. Jason Pride, chief of investment strategy and research at Glenmede, questioned whether the SpaceX IPO “is an indication of market froth.”
The biggest risk for Nvidia bulls is that Friday’s decline was more than just a shakeout of crowded positions. If the Consumer Price Index (CPI) inflation data released on June 10 at 8:30 a.m. ET revives concerns about interest rates, investors may reduce the premiums they are willing to pay for future earnings, and capital could rotate away from current chip leaders toward other AI-related plays.
Despite the setback, the fundamental bull case for Nvidia remains intact. Record revenue, a packed Seoul agenda, and Huang’s assertion that supply cannot keep pace with demand all support the long-term thesis. However, the stock is not immune to interest rate moves, competitive pressures, or a market that increasingly demands concrete results rather than narratives.
Traders will be watching Monday to see whether buyers step in after Friday’s rout or if further trimming of AI positions follows the steep chip-index decline. Even a flat open for Nvidia would be notable in this environment.
