Nvidia (NASDAQ: NVDA) shares moved lower in Wednesday premarket trading as investors continued to reassess the chipmaker’s valuation. The decline followed a volatile start to the week and kept attention on the cost of artificial intelligence projects.
The stock closed Tuesday at $197.01, up 0.25%, after falling 4.99% on Monday. It remained 4.75% below Friday’s close of $206.84. Based on 24.2 billion shares outstanding, Nvidia lost about $237.9 billion in market value across the two sessions.
The estimated loss was about 4.7 times Nvidia’s latest quarterly operating cash flow. The figure excludes Wednesday’s premarket move and assumes the company’s share count remained largely stable.
Nvidia still held a market value of about $4.77 trillion on Tuesday. Its trailing price-to-earnings ratio stood near 30.17. Investors now want clearer proof that customer spending can support the company’s valuation.
Demand for Nvidia chips remains strong, but investors are questioning whether cloud companies can earn enough from their AI spending. The next test will come from Microsoft and Meta, which report later Wednesday. Amazon will release results on Thursday.
Markets will focus on cloud revenue, capital spending, and cash flow. Strong revenue growth could support continued investment in Nvidia systems. Weak cash generation could raise more concern about the returns from AI infrastructure.
Nvidia’s Data Center unit produced $75.2 billion in first-quarter revenue. Total company revenue reached $81.6 billion. The unit therefore accounted for most of the company’s sales during the period.
Nvidia expects second-quarter revenue of $91 billion, with a possible 2% variation. The forecast excludes data center compute sales to China. Chief Executive Jensen Huang said AI-factory construction was moving at an extraordinary pace.
Supplier results also shaped market sentiment. SK hynix shares fell 9.6% on Wednesday after record quarterly profit missed forecasts. The company still reported strong demand, with major customers requesting more memory supply.
The wider chip sector also weakened. The PHLX Semiconductor Index fell 4.5% on Tuesday and remained about 25% below its June 22 record close. Investors will now watch whether Nvidia’s largest customers can show that AI capacity is producing steady revenue and cash flow.
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