Nvidia lost its position as the largest U.S. company by market capitalization to Apple after its stock plunged sharply. This drop reflected a broader slide in AI chip stocks during the trading session.
Stocks within the PHLX Semiconductor Index tumbled, all falling below their 50-day moving averages for the first time since April 2025. The index itself declined by 2.2 percent, highlighting the sector’s growing weakness. Investor concerns were fueled by reports that Nvidia might back a $250 billion guarantee for a major OpenAI data center, raising alarms over the company’s extensive commitments to customers.
Market Pressures and Emerging Competition
Adding to the complex backdrop, Chinese memory chip manufacturer CXMT entered the market with a strong debut, while Apple is actively lobbying the U.S. government to allow the use of Chinese-made chips in certain products. Analysts warn that a slowdown in capital expenditure harms chip makers, and competition from Chinese firms, once viewed as a minor issue, now looms heavily.
On the broader market front, the Nasdaq slipped 0.2 percent, the S&P 500 inched up by less than 0.1 percent, and the Dow gained 0.5 percent. Global oil prices also dipped below $89 a barrel, reflecting muted investor enthusiasm. Nvidia had maintained its spot as the largest American company throughout the peak of the AI boom but relinquished the title in this session as investors turned cautious about AI spending and shifting supply chains.
