SoftBank's $5.8B Exit Casts Doubt on AI's Momentum, Sending Nvidia Shares Plummeting

Nvidia shares fell sharply on November 11, 2025, as SoftBank Group's $5.8 billion sale of its entire stake in the AI chipmaker sent ripples through the technology sector. The Japanese investment giant's exit, disclosed in late October, raised questions about whether the company's aggressive bet on AI was losing momentum. Nvidia's stock dropped 3.1% to $192.41 during the session, marking its largest single-day decline in months despite maintaining a $4.85 trillion market capitalization. The move underscored growing investor caution around stretched valuations in the AI space, with the S&P 500 and Nasdaq Composite also posting declines as broader market concerns took hold.

The sell-off followed a pattern of volatility for Nvidia, which has seen its shares swing more than 5% on 19 occasions over the past year. Analysts attributed the drop to a combination of factors: SoftBank's exit, geopolitical tensions over U.S. export restrictions to China, and heightened competition in the AI chip market. The U.S. government's decision to block Nvidia from selling reconfigured versions of its Blackwell chips to Chinese customers further weighed on sentiment. Meanwhile, rivals like Advanced Micro Devices (AMD) signaled plans to challenge Nvidia's dominance, with AMD projecting the data-center chip market could reach $1 trillion by 2030.

Despite the near-term turbulence, analysts remain cautiously optimistic. Oppenheimer's Rick Schafer raised his price target for Nvidia to $265 from $225, while Susquehanna's Christopher Rolland reiterated a $230 target, citing strong demand for the company's GB200 AI hardware according to Barrons. However, the broader market's shift away from high-growth tech stocks added pressure. The Nasdaq fell nearly 2.5% on November 13, with all seven members of the Magnificent Seven group declining as reported by Barrons.

Nvidia's earnings report on November 19 is expected to provide critical clarity. The company must demonstrate sustainable demand for its Blackwell chips and address supply constraints, including delays in high-bandwidth memory (HBM) production. With a trailing P/E of 56.71 and a forward P/E of 30.30, the stock remains a focal point for investors weighing AI's long-term potential against near-term risks according to Investing.com.

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