Nvidia shares have declined approximately 16% since peaking on May 14. The selloff erased nearly $1 trillion in total market value. The company's forward price-to-earnings ratio now sits below the S&P 500 average. This valuation represents the lowest level since the artificial intelligence boom began.
Market rotation and competition concerns drove the decline despite strong growth projections. Major customers including Microsoft, Meta, and Google are developing internal AI chips to rival Nvidia. Regulators in the United States and Europe have intensified antitrust scrutiny of the company. These factors have prompted a reassessment of Nvidia's long-term dominance in the AI hardware sector.