What Happened?
Shares of leading designer of graphics chips Nvidia (NASDAQ: NVDA) fell 3.8% in the afternoon session after rising geopolitical tensions between the US and Europe over control of Greenland sparked a broad, risk-off mood in asset markets.
The sell-off was fueled by President Trump's push for the U.S. to acquire Greenland, reviving fears of trade confrontations and new tariffs against European allies. The tech-heavy Nasdaq index saw significant declines, with the "Magnificent Seven" technology stocks, Nvidia, Apple, Alphabet, Amazon, Meta, Microsoft, and Tesla, all sliding to start the week. This widespread downturn among major tech players weighed heavily on the overall market as investors reacted to the escalating political rhetoric.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Nvidia? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Nvidia’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 2.8% on the news that industry giant Taiwan Semiconductor Manufacturing Co. posted stronger-than-expected quarterly results, fueling optimism about sustained demand for artificial intelligence (AI) hardware.
As the world's largest contract chipmaker, TSMC's performance is often seen as a key indicator for the entire tech industry. The company reported record fourth-quarter revenue, surpassing Wall Street estimates, driven by robust demand for advanced chips used in AI applications.
This positive report has created a ripple effect across the sector, boosting shares of other semiconductor companies and equipment suppliers like ASML, Nvidia, and AMD. Investors are interpreting TSMC's success and its plans to increase capital spending as a strong signal that the AI-driven upcycle for semiconductors is resilient and likely to continue.
Nvidia is down 5.4% since the beginning of the year, and at $178.66 per share, it is trading 13.7% below its 52-week high of $207.04 from October 2025. Investors who bought $1,000 worth of Nvidia’s shares 5 years ago would now be looking at an investment worth $13,368.
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