Key takeaways
- NVDA shares crashed 9.26% to $181.60 after AI spending fears and US midterm election uncertainty triggered a tech selloff
- Approximately 600,000 Nvidia H200 chips reportedly remain in Hong Kong
- Nvidia's Nov. 17 earnings report could be a major catalyst
Nvidia shares plunged 9.26% on Nov. 5,and closed at $181.60 due to growing concerns about artificial intelligence spending and the fallout from the US midterm elections. The decline erased billions from the chipmaker's market capitalization and contributed to one of Wall Street's worst trading sessions in over a year.
The selloff spread across the semiconductor industry, with Advanced Micro Devices (AMD) plunging 17.3%, while the Nasdaq Composite dropped 5.5% and entered correction territory. The S&P 500 also declined 4.4%.
Why Is Nvidia Stock Falling?
The sharp decline followed Democratic gains in the US midterm elections, which raised concerns about potential restrictions on AI data center development.
Several newly elected Democratic officials have supported tighter oversight of data center construction, particularly due to concerns about electricity consumption, environmental impacts, and rising energy costs. Investors now fear that stricter regulations or construction delays could slow the expansion of AI infrastructure .which could potentially reduce demand for Nvidia's graphics processing units.
The selloff also reflected concerns about whether technology companies can maintain their enormous AI spending commitments.
Nvidia Faces Another Major Challenge in China
Adding to the uncertainty, approximately 600,000 Nvidia H200 artificial intelligence chips are reportedly being held in Hong Kong as Chinese authorities delay approval for large-scale imports.
According to Reuters, the processors are awaiting clearance despite demand from Chinese technology companies. Although Washington permitted certain exports to approved customers, Beijing is still cautious about increasing its dependence on American semiconductor technology.
Nvidia Earnings Could Determine What Happens Next
Attention is now shifting toward Nvidia's upcoming third-quarter fiscal 2027 earnings report, which is scheduled for Nov. 17. The company previously projected quarterly revenue of approximately $108 billion, which is a big increase from the $96.2 billion generated in the previous quarter.
Its data center business is still the primary growth engine, and generated $89 billion in revenue during the second quarter.
However, investors will be watching closely for any signs that regulatory uncertainty, data center delays, or geopolitical tensions could weaken future demand.
