Key Takeaways
- Shares of Nvidia were down 10% Monday afternoon, falling into bear market territory.
- The company’s latest quarterly financial results raised questions about what was next for the stock—and the AI trade—and uncertainty driven by US trade policy has further concerned investors.
- All told, markets are falling broadly, with few AI stocks spared Monday afternoon.
The AI trade continues to falter.
Nvidia (NVDA) stock slumped into bear territory Monday as equities nosedived after President Trump confirmed plans to impose a 25% tariff on Canadian and Mexican imports starting tomorrow.
Shares of Nvidia were down about 10% in late afternoon trading, extending a volatile stretch that followed last Wednesday’s earnings report. With Monday’s losses, Nvidia is trading more than 20% below its January all-time high.
Nvidia topped earnings estimates last week, but its meteoric rise and $3 trillion valuation left the chipmaker little room to disappoint. Narrowing profit margins spooked investors, prompting semiconductor and AI stocks to sell off last week.
The contagion continued on Monday, with fellow chipmaker Broadcom (AVGO), slated to report earnings on Thursday, following Nvidia stock lower. Shares of AI server maker Super Micro Computer (SMCI) fell 13%, and nuclear power providers Constellation Energy (CEG) and Vistra (VST), both lost more than 7%.
Very few AI stocks were spared. AppLovin (APP), which soared more than 700% last year on AI-fueled revenue growth, was up about 3%, bouncing back a bit from short-seller reports that tanked the stock last week.
Wall Street’s bullishness has been tempered lately by uncertainty about the outlook for the U.S. economy and the business of AI. Inflation has appeared stickier than expected, and consumer confidence has declined amid concerns about the consequences of Trump’s tariff policies.
The January release of Chinese start-up DeepSeek’s R1 reasoning model, which its developers said could compete with the most advanced U.S. models at a fraction of the cost, injected fresh uncertainty into the AI trade. AI infrastructure stocks—the chipmakers, server makers, and energy providers who have benefited from the build-out of AI data center capacity—plummeted on concerns that DeepSeek’s efficiency would undercut spending.
Since then, cloud providers have stood by their plans to aggressively invest in AI. Those commitments, however, have failed to reignite an AI rally.
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