Nvidia Enters Bear Market as Investors See a Buying Opportunity

Nvidia shares fell 9.3% Thursday afternoon, entering a bear market as the technology-stock selloff escalated. Dow Jones Market Data said the 9.3% drop was Nvidia’s largest percentage decline since January 2025. Shares ended 24.1% below their record close on Oct. 6, and MarketWatch defines a bear market as a fall of 20% or more from a recent peak.

Thursday also erased $447 billion of Nvidia’s market capitalization, Dow Jones Market Data showed. The data ranked it as the company’s second-largest one-day market-value decline. The same data showed that $1.4 billion in market capitalization had evaporated since the peak a month ago.

The figures show how quickly the market’s assessment changed. Nvidia moved from a record close on Oct. 6 to a 24.1% drawdown roughly a month later, while Thursday alone removed $447 billion. That reversal sets the buying case against the political and spending risks in the two managers’ comments.

What drove the selloff?

Michael Monaghan, a portfolio manager at Founder ETFs, told MarketWatch that investors were “sorting through the economic reality where the AI buildout is the driver of the economy.” MarketWatch reported that, following the midterm elections, investors had worried that Democrats would put up more roadblocks to data-center expansion.

Monaghan attributed the day-to-day volatility to hedge funds using high leverage and tighter risk limits. He said traders must pull out quickly as company shares begin falling, producing larger intraday moves. He added that the same market can turn around just as fast.

The leverage mechanics help explain how a fundamental debate produced a 9.3% session. Monaghan said forced exits can push the market lower quickly and that the same conditions can reverse it quickly. The one-day move reflects trading constraints as well as concern about the outlook for AI infrastructure.

Why does chip demand look resilient?

Monaghan expects Nvidia’s revenue to grow 70% next year. He said data-center construction will likely continue despite concerns about a halt, keeping demand for chips strong. He also said the underlying fundamentals of strong AI spending and demand remain intact.

Monaghan sees a buying opportunity in Nvidia’s battered shares going into the company’s earnings report later this month. He said investors will start to see the impact of Nvidia’s new Rubin chips.

He cited SpaceX’s just-signed $40 billion financing deal with Apollo Global Management to secure the chips. He raised the arrangement alongside investor concerns that political uncertainty could slow data-center expansion.

His setup argument rests on the gap between price and fundamentals. Monaghan said that when a stock price moves in opposite direction of the fundamentals, those typically become very good setups.

What does the valuation debate turn on?

David Wagner, a portfolio manager at Aptus Capital Advisors, told MarketWatch that Nvidia was trading more cheaply because investors worried about how intertwined its earnings were with massive amounts of AI infrastructure spending. Wagner said that spending could eventually slow down.

Wagner still credited Nvidia with a structural advantage. He said in emailed comments: “Nvidia likely has a wider moat than any other AI player, between its chips, its software ecosystem and the fact that developers are built around it.”

If investors believe AI will be a multi-year buildout, Wagner said Thursday’s decline looks more like a valuation reset than a broken thesis. He added that Nvidia’s stock looks like it’s gone on sale.

The two managers framed the risk differently. Monaghan focused on resilient chip demand and the mechanics of leveraged trading. Wagner focused on a potential slowdown in infrastructure spending and the durability of Nvidia’s ecosystem. Both cases rest on AI spending continuing at a substantial scale, and their cases differ on where they place the main risk.

Nvidia’s earnings report later this month is the next checkpoint Monaghan identified, with investors expected to begin seeing the impact of the new Rubin chips. The report will test whether strong AI spending can offset political constraints on data-center expansion. If infrastructure spending slows for a sustained period, Monaghan’s 70% revenue-growth forecast and Wagner’s valuation-reset case would face pressure.