• Nvidia (NASDAQ:NVDA) shares tumbled roughly 8% on Thursday, erasing year-to-date gains and leaving the chip giant down about 2% for 2026.
  • The Nasdaq Composite headed for its worst session since the 2025 tariff turmoil, with semiconductor ETFs sinking as much as 9.7% intraday.
  • Investors are repricing the AI infrastructure boom on financing costs, data-center construction risk and political uncertainty—not on any reported collapse in Nvidia’s earnings.

A High-Wire Act for the AI Trade

Nvidia Corp. ($NVDA) has erased its gains for the year, a stark reversal for the world’s most valuable chipmaker, as a brutal semiconductor selloff continues to hammer Wall Street’s favorite artificial-intelligence trade. The stock plunged approximately 8% on Thursday, leaving it down around 2% year to date and on pace for its worst annual performance since 2022, if losses persist.

The move rippled across markets. The Nasdaq Composite was on track for its worst trading session since the 2025 tariff turmoil, while semiconductor ETFs fell as much as 9.7% intraday, according to people familiar with the matter. The S&P 500 was down 2.9% and the Nasdaq 100 slid as much as 5% at its lows. Losses were not confined to U.S. shores: South Korea’s Kospi dropped 5.3%, a sign that the pressure on AI-linked names is global. AMD (NASDAQ:AMD) fell 10.7% and AI-cloud provider CoreWeave (NASDAQ:CRWV) lost 6.8%, extending damage across the AI infrastructure chain. Qualcomm (NASDAQ:QCOM) also sank in premarket trading after disappointing smartphone-chip sales, adding a separate end-market worry.

Not an Earnings Story

Crucially, the rout is not a reaction to a fresh collapse in Nvidia’s business. The company’s latest reported quarter, its fiscal second quarter ended July 26, 2026, showed revenue of $96.2 billion, up 106% year over year, with data-center revenue of $89.0 billion and GAAP net income of $59.7 billion. Diluted earnings per share came in at $2.46 on a GAAP basis and $2.22 adjusted, with gross margin at 75.0%. Management guided the following quarter to $108 billion in revenue, plus or minus 2%, excluding China data-center compute revenue.

Instead, the selloff reflects a broader repricing of the AI investment boom. Investors are increasingly focused on whether customers can sustain massive infrastructure spending as borrowing costs remain elevated—the 10-year Treasury yield was approximately 4.89% early Thursday—and as political risk around data-center construction mounts. Democratic gains in the midterm elections have fueled expectations of tighter oversight of data centers, though anticipated regulation is not the same as an enacted nationwide ban.

“What institutional investors like us are really focused on is regulatory stability,” said one portfolio manager who declined to be named. “The market is not questioning Nvidia’s current growth; it’s questioning the durability of the spending cycle that supports it.”

China and the Financing Question

Nvidia’s China exposure remains a separate overhang. The company’s guidance assumes no China data-center compute revenue, demonstrating how directly export restrictions affect its planning. Separately, reports citing Reuters (NASDAQ:TRI) described approximately 600,000 H200 chips awaiting approval in Hong Kong for shipment to mainland China—a development that, if confirmed, would illustrate the dual risk of U.S. export controls and Chinese import decisions.

Earnings quality also warrants attention. Quarterly net income included approximately $7.8 billion in equity-investment gains, while operating cash flow was $24.1 billion—a reminder that not all of the bottom-line growth is cash-generative. UBS (NYSE:UBS) analysts, according to secondary reporting, estimated that roughly 30% of expected U.S. data-center capacity additions in 2028 could face risk from possible construction pauses, a scenario-based estimate rather than a forecast of certain cancellations.

Nvidia did not respond to a request for comment. The company has consistently argued that AI computing is becoming productive, revenue-generating infrastructure and that demand is accelerating. For now, investors are testing that claim against borrowing costs, construction constraints and customers’ eventual returns. The latest release supports the strong-current-demand case; the selloff reflects doubts about its durability and valuation. Neither settles the outcome.

Correction: An earlier version of this article misstated the session’s index moves based on intraday figures. The Nasdaq Composite and Nasdaq 100 are distinct indexes, and the 5% decline referenced applies to the Nasdaq 100. A previous version also overstated the certainty of the “worst annual performance since 2022” comparison, which remains a conditional year-end projection.