How do you lose half a trillion dollars? The first step is having at least that much in the first place, which isn't easy. There are barely a dozen companies with market values of more than $500 billion in America and they all are rock-solid household names like JPMorgan Chase, Berkshire Hathaway, Apple and Amazon.com. Yet Nvidia, the high-flying AI chip producer that briefly overtook Microsoft a week ago to become the world's most valuable corporation, has now lost that much market value in just three gut-churning trading sessions. The parallels to Cisco Systems, which also overtook Microsoft to become the world's most valuable company for a heartbeat a quarter century ago, are hard to miss. But, as Heard on the Street's Dan Gallagher argues, Nvidia's valuation isn't nearly as stretched as the tech bubble hardware darling. And it is unlikely to face the rapid business decline that Cisco did just a year later as the air came out of dot-com valuations. Three days does not a trend make but, in case it does, the boom sure was fun while it lasted. Retail investors could talk of little else and financial television shows posted countdown clocks to Nvidia's earnings releases. Chief Executive Jensen Huang was even asked to sign a woman's chest at a trade show. Nvidia's shares had more than tripled in value over the past 12 months. Individual investors who bet on the shares reaped small fortunes–on paper at least. Back in the spring of 2000, when people were putting down deposits for a Mercedes or BMW with their unrealized tech stock gains, they at least had the option of downgrading their wheels to a cheap Hyundai. But, as Heard's Jacky Wong writes, the one-time punchline brand might now be the most successful auto company on the American market. That is largely due to its hybrid dominance. It will soon have a leg up in EVs too as the U.S. puts roadblocks on electric cars using Chinese components. The U.S. isn't alone in trying to slow the onslaught of cheap Chinese EVs, but it is taking a very different approach from Europe. As Heard's Europe Editor and auto industry-watcher Stephen WIlmot notes, the effect of the EU's more modest tariffs will be to localize production. The U.S. measures are very different. Another thing that looked different on Monday was the performance of various stock indices. Nvidia's travails helped pull down the tech-heavy Nasdaq Composite by 1.09%. The blue chip Dow Jones Industrial Average rallied 261 points or two-thirds of a percent.
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