From chipmakers to cloud giants: How is Nvidia's stock crash shaking the AI industry?

Nvidia, considered the backbone of the global AI boom, has suffered a huge loss in market value, with its stock down more than 10 per cent after the company's CEO, Jensen Huang, resigned following a deepening scandal around his affairs. Jensen's resignation comes on Thursday (November 12), prompting investors to sell off Nvidia's stock. The effect rippled across chipmakers, cloud providers and markets worldwide, dragging down the stocks of major global AI-linked firms.

For the first time since July, Nvidia's market value dropped below $4 trillion. This fallout has hit hardest among companies financially linked to Nvidia. Nvidia-backed neocloud firm CoreWeave dropped sharply on Thursday after surging more than 27 per cent on Wednesday. On Thursday, CoreWeave's stock fell as much as 15 per cent intraday before closing down roughly 7 per cent.

Hardware and memory supplier companies have felt the ripple effects. Memory giant Micron Technology and data storage firms like SanDisk and Western Digital fell between 1.6 per cent and 5.1 per cent, reflecting broader anxiety over the pace of AI data centre build-outs. Similarly, the stock of the Global semiconductor foundry Taiwan Semiconductor Manufacturing Co. (TSMC) dropped nearly 2 per cent, and European lithography leader ASML fell over 2 per cent as macro sentiment soured around AI capital expenditure sustainability.

In response, Nikhar Arora, Director & Builder, BOTS.Ai by HR Anexi, said, "Nvidia's volatility is one of the ways to show how interlinked the AI industry has become since chip manufacturers, cloud infrastructure providers, and adopters of AI solutions belong to this ecosystem. A drop in Nvidia's stock price can affect investors' confidence, investment decisions and infrastructure development, thus causing uncertainties in the whole AI market. Nevertheless, it doesn't prevent the business potential of AI from being long-lasting."

"Family-owned businesses in India need to pay attention to the possibility of AI solutions to resolve certain operational issues. An agent that deals with purchase orders or invoice verification won't lose its business value regardless of the state of the stock market. Now is the right time for business people to consider the effectiveness of their AI investments in terms of real results. It will be reasonable to identify a workflow and compare its current expenses and costs after the AI implementation to understand the actual ROI," he said.

Also read: US Commerce Secretary Lutnick to testify before Congress over Nvidia scandal: Can he lose his job?

Not every chipmaker lost its shares

Meanwhile, not every chip company faced a similar fall in its stock prices. Shares of AMD and Broadcom, the competitors of Nvidia in AI chips, actually rose on expectations that turmoil at Nvidia could create opportunities for rivals. The shift extended overseas too: Samsung Electronics and SK hynix shares fell on concerns over AI chip orders, with investors betting the shake-up could shift new orders from Nvidia’s GPUs toward AMD’s chips or Broadcom’s custom silicon, potentially disrupting foundry production at TSMC and Samsung.

Before the Huang scandal, the massive single-day wipeout of nearly $450 billion in Nvidia's market value occurred on November 5, 2026, on the US midterm election result. The effect was driven by fears of political shifts that could slow the AI infrastructure build-out.

Portfolio manager Jun Bei Liu noted that Huang is “the face of Nvidia,” and that nearly all new cloud data-centre businesses have been financed in a circular arrangement sponsored by Nvidia itself, meaning his exit raises deeper questions about the financial architecture underpinning the entire AI buildout, not just one company’s leadership crisis.