Nvidia shares fell 3.82% as Oracle's earnings shockwaves ripple through AI sector

Nvidia shares fell 3.815% in pre-market trading on Dec. 18, 2025, signaling renewed investor caution amid evolving regulatory and market dynamics.

The decline followed Oracle’s earnings-driven market shockwaves and broader AI sector volatility, with analysts highlighting regulatory fragmentation and AI infrastructure bottlenecks as key risks. Geopolitical tensions, including U.S.-China tech competition and memory shortages, further amplified sector fragility, as peers like AMD also faced sharp declines.

Investor sentiment turned bearish as Nvidia’s stock tested its lowest levels since late 2023, with technical indicators showing a 42.72% surge in implied volatility on key put contracts. Regulatory pressures, particularly state-level AI laws, and supply chain disruptions weighed on expectations for sustained AI demand, prompting a reevaluation of the company’s 40.71x dynamic P/E valuation.

Oracle’s 5.4% post-earnings slump triggered a ripple effect across AI-linked names, with Nvidia dropping 3.8% and Broadcom sliding 4.5%. The sell-off underscored growing concerns over AI-driven overvaluation and the sector’s sensitivity to policy shifts. Despite robust earnings and strategic moves like the SchedMD acquisition, investors demanded clearer proof of long-term growth resilience amid intensifying competition and geopolitical uncertainties.