Nvidia Falls 6.2 Percent and Tesla Drops 4.1 Percent as AI Selloff Deepens

Update: Nvidia closes lower, off the intraday low

Updated 03:28 UTC: Nvidia closed Thursday at 217.23 dollars, above the intraday low of 214.35 dollars reported below. Barron's put the shares down 1.8 percent at 217.25 dollars on Thursday, on top of a 3.2 percent loss on Wednesday, and MarketWatch said the stock finished down 1.8 percent. Reuters said Nvidia has fallen about 8 percent over the past week in the wider AI selloff. Fresh pressure came on Thursday from Anthropic. The AI startup told investors its third quarter revenue was 16.8 billion dollars, and a slower growth rate added to worries about AI spending, Investor's Business Daily and MarketWatch reported. Nvidia chief Jensen Huang said on Thursday that partner CoreWeave does not need a backstop and that its cost of capital is falling, Bloomberg reported via Barron's. India moved the other way on the same day. The Nifty 50 closed up 1.66 percent at 22,997.35, led by IT and bank stocks, as oil fell and the rupee rose for a fifth straight session, The Hindu BusinessLine reported. That close is covered in full in our Nifty rally report.

Nvidia and Tesla fell hard on Thursday, Oct. 15, as a selloff in artificial intelligence and growth stocks deepened for a second day.

Nvidia dropped 6.2 percent to 214.35 dollars, down from 228.52 dollars. Tesla fell 4.13 percent to 359.75 dollars, down from 375.23 dollars. Neither move came with company news. Traders sold both names as part of a wider exit from expensive tech stocks.

Hot inflation started the slide

The selling began on Wednesday after United States inflation for September came in hotter than expected. Reuters reported that the Nasdaq and the S&P 500 posted their biggest one day drop since July on Wednesday. CNN put the Wednesday losses at 1.88 percent for the Nasdaq Composite and 1.11 percent for the S&P 500.

A benchmark index for semiconductor stocks fell 4.3 percent on Wednesday, CNN reported, and stood about 12 percent lower over the past week. Nvidia fell 3.2 percent in that session. Thursday brought no relief. Nasdaq futures fell more than 1 percent in early trade, Reuters reported, and chip stocks extended their losses.

Debt is the new worry

Higher inflation lifted bets that the Federal Reserve will raise rates again. Reuters said traders put a 27 percent chance on a hike later this month, up from 20 percent a week ago, and a 67 percent chance on a hike in December.

Higher rates raise the cost of borrowing. That hits the AI buildout first, because data centers take large loans. CoreWeave, a data center operator with heavy debt, fell 15 percent on Wednesday and another 4.5 percent in premarket trade on Thursday, Reuters reported. Oracle fell 2 percent on Thursday after a drop of nearly 9 percent the day before. Bond yields for both companies hit record highs on Wednesday.

Taiwan chipmaker TSMC added to the gloom on Thursday. It reported a sixth straight record quarterly profit, Reuters said, but gave a cautious note on 2027 and pointed to economic uncertainty.

Tesla sits outside the chip trade, but it trades the same way. It carries a high valuation, so higher yields and weaker risk appetite hit it fast, the same pattern that pulled down other big tech names this week.

Why it matters

Chip and AI stocks have carried the market to record highs this year. When rates rise, the money behind that rally gets more expensive, and stocks priced for strong future growth fall first. Nvidia is the clearest test of that trade.

What happens next

Investors were waiting on producer prices, retail sales and jobless claims due on Thursday, Reuters reported. Those numbers will shape the next rate call. Earnings season will then test whether AI demand still justifies the spending, as one Jefferies economist told Reuters.