Topline
Shares of American artificial intelligence leaders Nvidia and Tesla tumbled Wednesday, shedding hundreds of billions of market value and leading a broader selloff across big technology stocks, which have struggled throughout 2025.
Jensen Huang, left, and Elon Musk appear together last decade.
Key Facts
Nvidia stock and Tesla stock each dove more than 6% by mid afternoon, contributing heavily to a more than 1% decline in the benchmark S&P 500 and more than 2% drop for the tech-concentrated Nasdaq.
AI chip designer Nvidia (about $200 billion) and electric vehicle maker Tesla ($54 billion) lost a combined $254 billion in market capitalization, a loss greater than the total valuation of Cisco, the U.S.’ 29th-largest public company.
The historically volatile stocks of Nvidia and Tesla have frequently been among the biggest movers as investors digest the latest foreign policy of President Donald Trump during his nascent second term, and Wednesday was no exception.
The losses came as the market’s rally based on Trump’s tariffs being less impactful than feared lost steam – CBOE Volatility Index (VIX), known as Wall Street’s fear gauge, spiked by 10% – as Trump reportedly prepares to announce a new slate of tariffs on car imports hours after his administration blacklisted dozens of Chinese tech companies from receiving American technology.
Both Tesla and Nvidia are particularly hit hard by the potential of retaliatory trade actions from abroad, including from China, which accounts for more than 10% of both firms’ revenues.
Tangent
Shares of Tesla’s less valuable U.S. automaker rivals Ford, General Motors and Rivian declined at least 0.8% apiece, and shares of Nvidia’s smaller chip competitors Advanced Micro Devices, Broadcom and Taiwan Semiconductor Manufacturing Company each fell about 5%.
Forbes Valuations
Tesla CEO Elon Musk and Nvidia CEO Jensen Huang are among the richest people on the planet, but both tech executives lost billions Wednesday. The world’s wealthiest person Musk’s net worth slid $9 billion to $348 billion, while Huang’s fortune slipped $7 billion to $99 billion, knocking him from 12th to 15th on Forbes’ real-time billionaires rankings.
Key Background
Both Tesla and Nvidia enjoyed explosive stock market gains in 2023 and 2024 as leaders in the AI revolution, but have flailed during 2025’s first three months. Shares of Nvidia and Tesla are down 16% and 33% year-to-date, respectively. Driving much of Nvidia’s losses was a record-breaking selloff as investors fretted over whether Chinese generative AI breakthroughs would lead to less demand for Nvidia’s pricey AI chips, while leading Tesla stock’s slump are concerns Musk’s polarizing role under Trump will ding sales of the company’s electric cars; Tesla new vehicle registrations are down 49% year-over-year through 2025’s first two months.
Further Reading
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