Nvidia was trying to make a stand. But one look at the artificial intelligence chipmaker’s stock chart over the past six weeks shows you what the Club stock up against. Nvidia’s early gains Thursday quickly reversed — and after President Donald Trump ‘s tariff announcement, Nvidia shares started to really fall. By the end of the day, it had really fallen off a cliff, losing 8.5% in the session following a strong quarter on Wednesday night. The decline was so severe that Nvidia exited the $3 trillion market capitalization club, now solely occupied by Apple after Microsoft ‘s own issues knocked it out earlier this week. Everybody is looking for a reason for why Nvidia fell so hard Thursday — ranging from tariff concerns to broader market rotation dynamics to concerns about the sustainability of AI demand after Chinese startup DeepSeek made a splash with its lower-cost, more efficient AI model. It’s probably a combination. But Jim Cramer tweeted on X Friday morning the real culprit for the severity of Thursday’s decline late in the session could be those risky zero-day options we first warned members about nearly a year and a half ago. Will it be any different by Friday’s close? Early gains were fading out in afternoon trading after Trump got into an argument with Ukraine President Volodymyr Zelenskyy in the Oval Office. The stock then recovered a bit after 1:30 p.m. ET. Unlike Thursday, Nvidia stock opened lower Friday and briefly slipped below its post-DeepSeek closing low of $116.66 on Feb. 3. It has been trying in fits and starts to get back to its pre-DeepSeek closing price Jan. 24 of $142.62. On Feb. 20, it was starting to look like a real possibility when shares closed above $140. That followed reassurance from Nvidia’s major clients — Meta Platforms , Microsoft, Alphabet , and Amazon — that they planned to continue their robust AI spending plans. But then came a run of three sharp declines out of four sessions into earnings — and, then of course, Thursday’s plunge, which put in play the close of $118.42 on Jan. 27. That’s the day DeepSeek shook Wall Street and Nvidia dropped nearly 17%. Expectations were high for Nvidia earnings Wednesday evening, and it delivered a quarterly beat and guidance raise, which we were shouting from the rooftops. On Thursday, even as shares were turning negative, we put out a commentary looking at three bullish aspects of Nvidia’s financials and commentary that sellers were getting all wrong. On Friday, Club Director of Portfolio Analysis Jeff Marks said on the Morning Meeting that he stands by our analysis that Nvidia’s business has been and will remain solid in the coming quarters. In light of the strained relationship between the U.S. and China, he said the stock is being held hostage by worries about whether the Trump administration will continue or even tighten former President Joe Biden’s restrictions on semiconductor exports to China. The rules were put in place to keep high-performance AI chips from Nvidia and others out of the hands of the Chinese government, which Washington fears could co-opt the technology for military use and threaten U.S. national security. A higher close Friday would certainly be welcome during a terrible run that was seeing Nvidia stock drop 9% for the week. Jim has been saying Nvidia shares need a washout event and alluded to that in an X post Friday. Was this week it? Only time will tell. But one thing is for sure, we still view Nvidia as one of the best companies in the world whose stocks should be “owned, not traded.” (Jim Cramer’s Charitable Trust is long NVDA, AAPL, MSFT, META, GOOGL, AMZN. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
The Nvidia headquarters in Santa Clara, California, in November 2024.
David Paul Morris | Bloomberg | Getty Images
Nvidia was trying to make a stand. But one look at the artificial intelligence chipmaker’s stock chart over the past six weeks shows you what the Club stock up against.
