By Allie Canal
Publication Date: 2026-02-26 22:07:00
Nvidia — the most valuable company in the world thanks to its place atop the AI food chain — generated a staggering $120 billion in profits last year.
This includes an eye-popping $43 billion during the three-month period ending in January, one of the strongest quarters of any business ever recorded.
Investors didn’t seem to care.
Shares of Nvidia fell more than 5% Thursday, following the results. With a total market value of roughly $4.5 trillion, the company’s one-day loss amounted to roughly $256 billion worth of market capital.
Nvidia’s stock price decline is part of a broader phenomenon dubbed the “AI scare trade” that is percolating in certain corners of the stock market.
This bearish play threatens the very driver that has powered broader, double-digit gains across the benchmark S&P 500 for the past two years.
And while the stock market might look broad, its gains are increasingly concentrated in just a handful of mega-cap names, including Nvidia. In other words, the entire market’s performance is heavily tied to the performance of these select companies.
Nvidia says its growth story is very much still intact.
“We have now seen the inflection of agentic AI and the usefulness of agents across the world and enterprises everywhere,” Nvidia CEO Jensen Huang said during the company’s quarterly earnings call Wednesday, referring to AI chatbots like OpenAI’s ChatGPT and Anthropic’s Claude.
“You’re seeing incredible compute demand because of…
