On the evening of November 25, after the U.S. stock market opened, NVIDIA's stock price plummeted by 6.64%, with a market value evaporating by approximately 2.09 trillion yuan. This amount roughly corresponds to the total market value of Moutai, driven by multiple factors such as industry competition, short-seller pressure, and insufficient market confidence. A detailed analysis is as follows:
1. The industry competition has encountered a strong impact: On the same day, it was reported that Meta is considering deploying Google's TPU chips in data centers starting in 2027, and may also rent TPUs through Google Cloud next year. Google Cloud executives stated that this move is expected to cut at least 10% of NVIDIA's annual revenue of hundreds of billions of dollars, directly shaking market confidence in NVIDIA's leading position in AI chips.
2. Prominent short sellers continue to amplify panic: Notable US short seller Michael Burry reaffirmed his bearish stance on Nvidia on November 23, calling the current AI craze a 'magnificent absurdity' and specifically naming Nvidia as a precursor to the collapse of the AI industry bubble. Previously, Burry had purchased put options on Nvidia, and this recent statement further exacerbated investor selling sentiment.
3. The controversy over institutional reductions and valuation bubbles is intensifying: Recently, several major institutions, including SoftBank, have drastically reduced their holdings in Nvidia, cashing out $5.83 billion, and Bridgewater has significantly reduced its holdings by 65.3%. At the same time, there is ongoing debate over its valuation. Although Nvidia's third-quarter financial report is impressive, it has been accused of being caught in a dilemma of 'poor performance debunking AI, while good performance fuels the bubble.' Moreover, issues such as its cyclical financing model, high accounts receivable growth, and inventory backlog have raised doubts among investors about the authenticity of its financial data and the sustainability of its business.
4. Setbacks in the Chinese market affect long-term expectations: Due to US export controls on chips to China, Nvidia's third-quarter revenue in the Chinese market plummeted by 63% year-on-year for fiscal year 2026, with sales of the H20 chip tailored for the Chinese market amounting to only about $50 million. Its CFO has also warned that sales in China may drop to zero in the next two quarters, and given that China is a massive AI chip market, this downturn has heightened investors' concerns about its growth potential.
