Nvidia Shares Slip 23% From May High on Institutional Rotation, Fed Concerns
NVDA•Nvidia shares have underperformed the S&P 500 for six consecutive trading days—the longest streak since September 2025—and have retreated about 23% from mid-May highs. Institutional rotation into memory chips and projected 70% surge in AI capex to over $700 billion this year have weighed on momentum.
1. Underperformance Streak
Nvidia shares have lagged the S&P 500 for six straight trading days, marking their longest relative decline since September 2025. This streak reflects growing investor caution after the stock peaked in mid-May and began its pullback.
2. Key Drivers of Pullback
The primary factors driving the slide include institutional sector rotation away from AI hardware into memory chip stocks and unease over a projected 70% surge in AI capital expenditures to more than $700 billion this year. Concerns about potential Federal Reserve rate hikes have added pressure by raising financing costs for large-scale AI projects.
3. Outlook and Upcoming Catalysts
With the second quarter closing and hyperscaler earnings season set to begin in the coming weeks, investors will monitor capex disclosures closely. Strong spending plans from cloud providers could serve as a catalyst to reignite interest in Nvidia shares.
