NVIDIA Stock Crash: 20% November Plunge Sparks AI Bubble Fears Amid Google TPU Competition

NVIDIA’s stock is in a dramatic November correction. Shares have plunged roughly 20% from their October peak. This sharp pullback is shaking investor confidence in the high-flying AI sector. It raises urgent questions about market sustainability and growing competition.

FILE PHOTO: Nvidia and OpenAI logos are seen in this illustration taken, September 22, 2025. REUTERS/Dado Ruvic/Illustration/File Photo/2025-09-23 21:13:39/

The drop marks the chipmaker’s steepest decline of 2025. It comes despite the company posting record-breaking quarterly earnings just weeks ago. According to Reuters, the sell-off reflects growing anxiety over valuations and emerging competitive threats from rivals like Google.

What Drove the Sharp Sell-Off?

The November collapse resulted from a perfect storm of pressures. Despite stellar third-quarter results, investors grew nervous. Concerns about an overhyped AI market intensified significantly. Profit-taking accelerated after a massive three-year rally.

A key trigger was competitive news. Reports indicated Meta was exploring Google’s custom TPU chips for future data centers. This suggested potential erosion in NVIDIA’s dominant market position. The news sparked a wave of defensive selling across the tech sector.

Valuation Concerns Take Center Stage

Analysts are fiercely debating NVIDIA’s worth. Bulls highlight its unmatched earnings growth and technological lead. Bears warn the stock price had simply run too far, too fast. The correction is seen by many as a necessary market recalibration.

Financial figures tell a conflicting story. NVIDIA’s revenue soared to $57 billion last quarter, up 62% year-over-year. Yet its stock price faced intense downward pressure. Skeptics like investor Michael Burry have questioned accounting practices, adding to the negative sentiment. Wall Street remains deeply divided on the path forward.

The Google TPU Competitive Threat

Google’s in-house AI chips pose a real challenge. The Tensor Processing Unit (TPU) is gaining traction within its cloud division. CNN reported that Meta’s interest in these chips sent a shockwave through the market. It showed big tech companies are actively seeking alternatives to NVIDIA’s costly hardware.

NVIDIA responded by downplaying the threat. CEO Jensen Huang stated his company maintains a “generation ahead” lead in performance. He emphasized the strength of NVIDIA’s CUDA software platform, which locks in developers. However, the mere prospect of competition has altered market psychology.

Is This a Buying Opportunity or a Warning Sign?

Many analysts view the plunge as a healthy pullback. They argue NVIDIA’s fundamental business remains robust. Data center demand for AI chips shows no signs of slowing. The company’s guidance for the current quarter is still exceptionally strong.

Long-term investors might see this as a chance to buy. The median analyst price target suggests significant upside from current levels. However, the event serves as a stark reminder. No market leader is immune to volatility, especially after a historic run-up.

This NVIDIA stock crash highlights the fragile nature of the AI investment boom. It underscores how quickly sentiment can shift, even for a company with stellar financials. The coming weeks will test whether this is a temporary stumble or the start of a broader tech downturn.

Thought you’d like to know

What caused NVIDIA’s stock to drop 20%?

The drop was caused by profit-taking after a huge rally, fears of an AI bubble, and news of competitive pressure. Reports that Meta might use Google’s AI chips instead of NVIDIA’s triggered significant investor concern.

How long is this NVIDIA correction expected to last?

Analysts are divided. Some see it as a short-term buying opportunity before a year-end rebound. Others warn it may signal a longer period of consolidation as the market digests high valuations and rising competition.

Is Google’s TPU a real threat to NVIDIA?

It is a growing competitive concern. Google’s chips are improving and are used in its own cloud services. While NVIDIA has a large software lead, big tech companies wanting to reduce costs and diversify supply creates a new market dynamic.

Should investors buy NVIDIA stock after this crash?

It depends on risk tolerance. Bulls see strong fundamentals and a temporary dip. Bears cite extreme valuations and emerging risks. Consulting a financial advisor for personalized advice is always recommended.

Does this mean the AI boom is over?

Not necessarily. The technology’s adoption is still accelerating. However, the stock drop suggests the financial markets may have gotten ahead of reality. It likely indicates a shift from speculative frenzy to a focus on sustainable profitability.