Nvidia's Dramatic Plunge Sparks Tech Sell-off as Semiconductor Giants Reel

On February 27, U.S. stock markets witnessed a significant downturn, marked by steep declines across major technology and chip stocks. Among notable movers, Nvidia's shares took a dramatic hit, plunging 8.48%, and resulting in a staggering market capitalization loss of approximately $271.5 billion, nearly equivalent to 2 trillion yuan. This decline comes on the heels of Nvidia's latest financial report that, despite robust overall growth figures, showed a deceleration in certain key sectors, sparking investor concerns.

Nvidia's report for the fiscal year ending January 26, 2025, highlighted a 78% increase in fourth-quarter revenue to $39.3 billion, with net profits reaching $22.1 billion. Nonetheless, the company has observed a persistent slowdown in year-on-year revenue growth over four consecutive quarters, with a similar trend materializing in its data center business, underscoring market apprehensions.

This sell-off in Nvidia shares contributed to a broader retreat in semiconductor stocks, dragging down the Philadelphia Semiconductor Index by over 6%. Major players like Advanced Micro Devices and Taiwan Semiconductor Manufacturing Company experienced declines nearing 16% and 7%, respectively, reflecting a wider sentiment of unease within the tech sector.

The ripple effect was evident as the impact extended beyond Nvidia, affecting other major U.S. tech stocks. The Wind U.S. Tech Giants Index saw a decline of 3.26%, its lowest in over three months. Notable declines were recorded by Tesla, down by more than 3%, alongside Amazon and Meta, both shedding over 2%, while Microsoft and Apple each fell by over 1%.

The broader market indices also felt the pressure, with the Nasdaq Composite Index tumbling more than 530 points. By the end of the trading session, the Dow Jones, Nasdaq, and S&P 500 indexes had fallen by 0.45%, 2.78%, and 1.59%, respectively. Despite these setbacks, the Dow Jones remains the only major index boasting positive returns for the year.