Nvidia's stock has come under heavy selling pressure, sending ripples across the global artificial intelligence (AI) industry. The resignation of its CEO Jensen Huang has added to investor concerns, with several AI-linked companies seeing their shares fall, while rivals are emerging as potential beneficiaries.The development comes at a time when technology companies are spending billions of dollars on AI infrastructure, including advanced chips, data centres and cloud computing services.
With Nvidia at the centre of this ecosystem, any uncertainty around the company is being closely watched by investors and businesses worldwide.Nvidia shares fell as much as 14.3% during trading on Thursday, November 12, before recovering some losses to close 5.4% lower, according to Reuters. The company's market value was at risk of falling below $4 trillion, for the first time since July 2025, after losing more than $1 trillion over the previous month, amid rising interest rates, mounting debt among tech companies and regulatory concerns, the report mentioned.So, how is Nvidia's stock decline affecting other global AI companies?
WHY HAS NVIDIA STOCK FALLEN?Nvidia's troubles intensified after its board announced an investigation into CEO Jensen Huang's relationship with a businesswoman suspected of having links to Chinese espionage. Huang subsequently resigned on November 12, bringing an abrupt end to his leadership.The company appointed its Chief Financial Officer Colette Kress as interim CEO while it searches for a permanent successor.
Huang played a major role in building Nvidia into one of the world's most valuable companies. Its chips are widely used to train and run AI models, making the company an important supplier for technology giants and emerging AI businesses.However, the concerns go beyond the leadership change.
Investors are also questioning the sustainability of massive AI investments, rising borrowing costs, regulatory pressure and the financial arrangements between Nvidia and companies that buy its chips.Nirav Karkera, Head of Research and Fund Manager at W by Groww, said the stock's fall came at a time when investors were already nervous about the AI sector."Nvidia’s fall shocked a market that was anyway nervous. AI stocks were already under pressure on worries that tighter rules could slow data centre growth.
The stock recovered much of its early loss. It appears that investors are worried about governance and not as much about demand at this point," he said.AMD, BROADCOM GAIN AS NVIDIA SLIPSOne of the immediate beneficiaries of Nvidia's troubles has been its competitors.Shares of Advanced Micro Devices (AMD) and Broadcom rose more than 4% each on Thursday, according to Reuters.
Investors are betting that uncertainty around Nvidia could encourage technology companies to diversify their chip suppliers rather than depend heavily on a single company.Other established players, including Intel, are also looking to strengthen their position in the AI chip market.Nvidia has built a strong lead in graphics processing units (GPUs), which are used to handle the large amounts of computing required for AI applications. However, growing demand for AI infrastructure could create opportunities for competing chipmakers.For companies developing AI models, having more chip suppliers could also mean greater choice and less dependence on one technology provider.COREWEAVE, NEBIUS AND OTHER AI CLOUD FIRMS FACE PRESSUREThe impact is also visible among companies that provide computing capacity to AI businesses.Nvidia has invested in several companies that purchase its chips and offer computing services to customers through cloud platforms.
These businesses, often called neocloud companies, have benefited from the growing demand for AI computing.However, the latest developments have raised questions about their funding and business models.CoreWeave shares dropped 8.1% on Thursday. Nvidia had invested $2 billion in the AI infrastructure company in January 2026, becoming its second-largest shareholder as the two companies looked to expand their partnership and increase data centre capacity in the US, reported Reuters.
Meanwhile, shares of another Nvidia-backed cloud computing firm, Nebius, plunged 18% after it lowered its revenue forecast for 2026.Other AI cloud companies, including IREN and Applied Digital, also traded lower.Karkera said Nvidia's position as a major investor in several cloud companies has made the impact of its stock decline more widespread."The damage is spreading because Nvidia sits at the centre of the AI money chain. It has funded many of the cloud companies that buy its chips.
When the backer is shaken, firms sitting lower in the value chain feel it most, which is why they fell harder than Nvidia," he said.He added that market sentiment can change quickly, with companies seen as strong during a rally becoming potential risks when investor confidence weakens.The concern is that if Nvidia reduces its investments or changes its financing strategy, smaller companies that depend on such support could find it harder to expand their data centre capacity.AI INFRASTRUCTURE COMPANIES CAUGHT IN THE SELL-OFFThe pressure has spread beyond chipmakers and cloud service providers.Super Micro Computer, which supplies servers used in AI data centres, saw its shares fall 12% on Thursday. Memory chipmaker Micron Technology, storage companies Sandisk and Western Digital, and photonics suppliers Lumentum and Coherent also faced selling pressure.Oracle, which is expanding its cloud AI infrastructure using Nvidia chips, also saw its shares decline.This shows how closely connected the AI industry has become.
A company selling chips, another building servers and a third providing cloud computing may all be affected by the same shift in investor sentiment.WHAT LIES AHEAD FOR THE GLOBAL AI INDUSTRY?Nvidia's stock decline has raised questions about whether the AI industry can maintain its current pace of investment.The company reported revenue of $96.2 billion in the second quarter of fiscal 2027, up 106% from a year earlier. Its data centre business alone generated $89 billion, accounting for the bulk of its revenue.These figures underline the scale of demand for AI infrastructure.
However, investors are now looking beyond revenue growth and want to know whether the massive spending on AI will translate into sustainable business returns.Uditanshu Agarwal, Director at Staunch Electronics, said the recent volatility in Nvidia's stock shows how developments involving a single major technology company can influence sentiment across the AI and semiconductor industries.He added that the long-term growth of AI would depend on more than chipmakers, requiring a strong manufacturing ecosystem, reliable supply chains and greater investment in technology infrastructure.“For India, this presents an opportunity to strengthen its domestic electronics manufacturing capabilities and become a more integral part of the global technology supply chain,” Agarwal said. Growing AI adoption is likely to drive demand for electronic components, computing infrastructure and connected devices, making local manufacturing capabilities and innovation increasingly important.Nvidia's upcoming quarterly results will therefore be closely watched for clues about chip demand and future growth.For now, the sell-off has created opportunities for rival chipmakers while putting pressure on companies closely linked to Nvidia's ecosystem.
The bigger question is whether this is a temporary market reaction to a leadership crisis or the beginning of a wider reassessment of the global AI boom.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- Ends