Nvidia stock plummets, briefly losing second-place global ranking

Since the controversy erupted this weekend, the company has seen over $400 billion wiped from its market capitalization, amidst concerns about the artificial intelligence (AI) sector.

As a result of the stock decline, Nvidia temporarily lost its position as the world’s second-largest company by market capitalization to Microsoft.

Both companies were trading just below $400 billion on Tuesday afternoon, while Apple remained in the lead with a market capitalization of over $5000 billion.

Nvidia hadn’t held such a low position in this ranking since 2025.

The drop follows a scandal in which Nvidia’s CEO, Jensen Huang, admitted to a relationship with a Chinese executive suspected by U.S. intelligence of working for the Chinese government, which denies the allegations.

Mr. Huang and the company are now facing a lawsuit in the United States alleging deception.

The class-action lawsuit, filed Monday by a Los Angeles law firm, accuses them of concealing or downplaying information about Mr. Huang’s relationship with the executive.

David Morrison, an analyst at Trade Nation, noted that many financial commentators believe the issue is personal and that Jensen Huang can be replaced. However, he added that the consequences could be more significant.

Nvidia is a cornerstone of the billions of dollars invested in building infrastructure for artificial intelligence, according to the expert.

The scandal emerges at a time when the AI sector is facing turbulence in the stock market due to the enormous sums spent to operate advanced models.

The Democratic Party’s victory in the U.S. midterm elections, with the prospect of stricter regulations for data centers – essential for AI development – is adding to the tension.