As Wall Street drops, Nvidia suffers record $279 billion loss in market valuation

In the deepest ever single-day decline in market value for a U.S. company, shares of Nvidia have plummeted 9.5%. Nvidia lost $279 billion in market capitalization, a major indication that investors are becoming more cautious about emerging AI technology that has fueled much of this year's stock market gains.

The latest jitters about AI come after Nvidia last Wednesday gave a quarterly forecast that failed to meet the lofty expectations of investors who have driven a dizzying rally in its stock.

Intel’s shares dropped nearly 9% after Reuters reported CEO Pat Gelsinger and key executives are expected to present a plan to the company’s board of directors to slice off unnecessary businesses and revamp capital spending at the struggling chipmaker.

Worries about slow payoffs from hefty AI investments have dogged Wall Street's most valuable companies in recent weeks, with shares of Microsoft and Alphabet trading lower following their quarterly reports in July.

Following Nvidia's quarterly report last week, the mean analyst estimate for annual net income through January 2025 has climbed to $70.35 billion from about $68 billion ahead of last week's report.

Those increased earnings estimates, combined with Nvidia's share losses, have the chipmaker now trading at 34 times expected earnings, down from over 40 in June and in line with its two-year average.