Nvidia Loses $1 Trillion in Market Value Amid Sector Rotation Despite Strong Fundamentals

Nvidia, the leading chipmaker, has seen its market value plunge to the lowest level since early 2019, erasing approximately $1 trillion in value since its peak on May 14, 2026. The company’s stock has dropped about 16% amid a broader investor shift within the semiconductor sector, despite no deterioration in Nvidia’s business fundamentals. Analysts continue to raise earnings forecasts, and Nvidia’s dominance in the GPU server market remains strong, with its market share rising to around 97% by the end of 2025, up from 95% the previous year.

Currently, Nvidia trades at a forward price-to-earnings ratio of 18, below the broader market averages of over 20 for the S&P 500 and nearly 23 for the Nasdaq 100. This valuation places Nvidia cheaper than more than half of the companies in the S&P 500. The decline reflects investors reallocating capital toward other semiconductor segments, particularly memory and storage companies.

Micron has emerged as the biggest beneficiary of this rotation, with its stock soaring 229% in 2026 following a 239% gain in 2025. Other competitors such as AMD and Intel have also posted double- or triple-digit gains, while Nvidia’s stock rose only 5.6%, lagging behind the S&P 500’s 9.6% increase. During the second quarter, Micron, Intel, and AMD collectively added about $2 trillion to their combined market value as investors diversified their artificial intelligence exposure beyond Nvidia.

Micron’s meteoric rise has been driven by high prices for high-bandwidth memory chips, boosting its gross margin to 84.9% in the third quarter compared to 39% the previous year. Nvidia’s CEO Jensen Huang remains at the helm as the company navigates this sector rotation amid strong operational performance.