Nvidia Loses $1 Trillion in Market Value as Investors Bet on Memory Makers

Nvidia, the longtime leader of the AI-driven bull market, has shed roughly $1 trillion in valuation in under two months. The company's shares have fallen 16 percent from the peak they hit on May 14, 2026, pulling its valuation back to levels last seen before the AI boom.

The decline is not the result of weakening business fundamentals at Nvidia. Analysts continue to raise their earnings forecasts for the company, and its share of the server GPU market remained around 97 percent at the end of 2025. Instead, investors are shifting capital toward memory chip makers, whose margins are expanding faster than Nvidia's.

Why the capital rotation

The shift in sentiment was triggered by blowout quarterly results from Micron, which sent the memory maker's shares up 16 percent in a single session. Prices for high-bandwidth memory, a key component in AI chips, remain elevated and, according to analysts, will stay high at least through 2028.

Each new generation of Nvidia chips requires more memory than the last, and in the current market environment that dynamic benefits suppliers like Micron more than Nvidia itself. Micron's gross margin rose to 84.9 percent in the third quarter, up from 39 percent a year earlier.

Sentiment has shifted. We're seeing companies where expectations were very low, like Micron, stealing the show. - Michael Bailey, Fulton Breakefield Broenniman

Valuations against the market

Despite the drop, Nvidia now trades cheaper than half the companies in the S&P 500. While the S&P 500 as a whole is valued at more than 20 times forward earnings and the Nasdaq 100 at nearly 23 times, Nvidia trades at around 18 times. Since the start of 2026, the company's shares have gained just 5.6 percent, well behind the S&P 500's 9.6 percent rise over the same period.

The Philadelphia Semiconductor Index has climbed 74 percent in 2026, but the gains have been unevenly distributed. Micron, AMD and Intel posted double- or triple-digit gains, while Nvidia lagged behind the rest of the sector.

What comes next for forecasts

Analysts are split on Nvidia's outlook, though most remain positive. Analysts with buy ratings put the average price target at a level implying roughly 53 percent upside from the current price. Morgan Stanley maintained its overweight rating with a $288 price target, citing Nvidia's roughly 85 percent share of the AI processor market, while Goldman Sachs set a $285 price target, pointing to the company's $80 billion share buyback program.

Not everyone shares that optimism. Wells Fargo analyst Aaron Rakers cut his Nvidia price target from $375 to $315, though he kept his buy rating, reflecting growing caution in parts of the market toward the company's previously very high valuation.

What it means for investors in Poland

For Polish investors with exposure to Nvidia, even indirectly through index funds or technology ETFs, this capital rotation means noticeably higher volatility for AI-linked portfolios. The move also shows that the market is starting to differentiate between AI-related companies rather than treating the whole sector as a single bet, which could matter when assessing the valuations of domestic tech companies tied to the AI supply chain.

Sources: Nvidia's $1 Trillion Slide Sends Valuation to Pre-AI Boom Levels (Bloomberg), Nvidia market cap falls by $1 trillion as stock swoons (finance.yahoo.com)