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Nvidia (NVDA) came a day after Nvidia shares had closed at their highest level since early November, underscoring how abruptly sentiment shifted.

Nvidia stock was trading down despite having risen earlier in the week on optimism around renewed access to China and strong earnings-related signals from major customers.

Global deleveraging hits tech and metals
 

The selloff was led by technology stocks, with Microsoft (MSFT) shares collapsing more than 11% in what would rank as the company’s worst one-day decline since March 2020.

The drop followed Microsoft’s earnings report, which showed slowing growth in its cloud business, and it weighed heavily on the Nasdaq Composite, which fell by roughly 1.5%.

The risk-off move was not confined to equities. Precious metals, which had surged to record highs earlier in the week, also reversed sharply as investors rushed to reduce exposure to volatile assets.

Gold, which had briefly soared above $5,600 per ounce earlier in the session—after never having traded above $5,000 prior to Sunday night—plunged nearly 10% within minutes during US morning trading, falling back below $5,200.

Silver followed a similar trajectory, sliding from around $121 per ounce to $108.

The synchronised selloff across equities and commodities highlighted the scale of deleveraging underway as investors unwound crowded positions amid heightened uncertainty.

AI spending signals remain supportive
 

Despite the sharp market pullback, commentary from Nvidia’s largest customers offered reassurance about the durability of demand for artificial intelligence infrastructure.

Investors are closely watching earnings from large technology companies to gauge whether spending on Nvidia’s AI chips is slowing.

Microsoft reported fiscal second-quarter capital expenditures of $37.5 billion, exceeding Wall Street’s consensus estimate of $36.7 billion.

The company said roughly two-thirds of that spending was driven by chips and related infrastructure.

While Microsoft expects capex to moderate in its fiscal third quarter, management emphasised that demand continues to exceed supply.

“Importantly, [Microsoft] management noted that demand for AI and cloud services continues to outpace supply, and while near-term margins remain pressured by AI infrastructure depreciation, most large GPU deployments are already contracted for the useful life of the hardware, supporting margin expansion as assets mature,” William Blair analyst Jason Ader wrote in a research note.

Those comments may help ease investor concerns that large cloud providers are overstating the useful life of Nvidia’s GPUs and other AI processors.

Microsoft also addressed questions around its use of in-house AI silicon, noting that while it is deploying its Maia 200 chip, it will continue to rely heavily on third-party suppliers.

“We want to make sure we’re not locked into any one thing…we have great partnership[s] with Nvidia, with AMD (AMD), they are innovating, we are innovating,” Microsoft Chief Executive Satya Nadella said on the company’s earnings call.

Meta (META) Platforms delivered an even stronger signal. The Facebook parent said capital spending could reach as much as $135 billion in 2026, around 20% above Wall Street expectations and nearly double last year’s investment level, driven largely by AI infrastructure.

Analysts remain constructive on Nvidia stock
 

Wall Street analysts largely dismissed the recent weakness in Nvidia shares as a function of broader market volatility rather than a deterioration in fundamentals.

Morgan Stanley reiterated its Overweight rating and $250 price target on Nvidia, citing increasingly strong market checks across the artificial intelligence ecosystem.

The firm acknowledged that Nvidia’s stock has lagged recently as AI beneficiaries broaden and supply chain constraints affect much of the semiconductor industry.

However, it described concerns about potential market share losses as “overblown.”

Morgan Stanley said Nvidia’s upcoming Vera Rubin platform should reinforce its leadership in AI computing and help counter fears around competition.

The bank also noted investor unease around the financing of frontier AI model developers and Nvidia’s role in that ecosystem, saying the situation “requires some adjustment,” but does not undermine the long-term opportunity.

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