Nvidia has officially exited the $3 trillion market cap club, leaving Apple as its sole member. The chipmaker's shares plunged over 8% on Thursday, wiping out roughly $273 billion in market value and bringing its total capitalization down to $2.94 trillion. This sharp decline followed Nvidia's recent earnings report, despite the company surpassing analysts' expectations.

Even after the drop, Nvidia remains the second most valuable tech company in the U.S., trailing behind Apple but still ahead of Microsoftone of its largest clients. The company reported a 78% year-over-year revenue increase, reaching $39.33 billion. Notably, its data center revenue driven by AI-focused graphics processing units (GPUs) surged 93% to nearly $36 billion.

However, investor concerns have weighed heavily on Nvidia’s stock performance. So far in 2025, its shares have lost 10% of their value. Factors contributing to this slide include export controls, tariffs, the emergence of more efficient AI models, and fears that the company’s once-rapid growth rate may be slowing.

Despite these challenges, Nvidia's influence in the AI sector remains strong. CEO Jensen Huang recently emphasized the rising demand for advanced computing power, stating that next-generation AI models require 100 times more computational capacity to process complex tasks compared to older models.

"The amount of computation necessary to do that reasoning process is 100 times more than what we used to do," Huang told CNBC in an interview.

Nvidia’s future also hinges on its cloud service partnerships, with major players like Microsoft, Google, and Amazon accounting for around half of its data center revenue. The company has reassured investors that its upcoming Blackwell chip will roll out smoothly, as production issues have been largely resolved.

Although Nvidia first crossed the $3 trillion mark in June 2024, its recent dip signals growing investor caution about AI’s long-term profitability. The question now is whether Nvidia can regain momentum and reclaim its spot in the elite $3 trillion club.

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This article was created with AI assistance.