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  • Writer's pictureRealFacts Editorial Team

Nvidia's $400 Billion Market Cap Loss

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One of the largest companies in the world by market capitalization, Nvidia (NVDA), experienced a significant decline in its stock price recently. On Monday, the stock fell over 6%, contributing to a cumulative 12% drop over the past few trading days. While a 12% decrease might not seem substantial at first glance, the impact becomes more striking when considering Nvidia's massive valuation of around $3 trillion. This 12% drop translates to a staggering $400 billion loss in market value in just three days—a huge number by any standard. 

According to Matt Krantz, an author at Investors Business Daily, this $400 billion loss is “more than 484 companies in the S&P 500 are worth individually — or 96% of the index. It's almost like a United Parcel Service (UPS) or Citigroup (C) vanished overnight.” This comparison underscores the significant influence Nvidia has on major stock indexes such as the Nasdaq 100 and the S&P 500. Bespoke Investment Group commented on this phenomenon, stating, "Extreme AI enthusiasm and very large stocks are driving multiples, with the rest of the market seeing a very different valuation." It’s interesting to note the high multiples of Nvidia, which has a Price-to-Earnings (P/E) ratio hovering around 70, compared to the aggregate P/E ratio of the rest of the S&P 500, which sits in the mid-twenties. 

This discrepancy highlights the substantial premium investors are willing to pay for Nvidia's earnings relative to the broader market. With a relatively small number of mega-cap stocks driving market movements, investors should be cautious of the possibility of large market swings being triggered by downturns in these trillion-dollar-valued companies. To further put Nvidia's recent loss into perspective, the following list shows companies that are each worth individually less than the $400 billion in market cap Nvidia lost in the last three days.


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