Nvidia Down 22.6% in a Month as Hedge Funds Post Rare Losses

Nvidia (NASDAQ:NVDA) has fallen 22.6% over the past month, trading at $177.51 in premarket action on November 11 after a 5.1% bounce from the November 10 close of $168.89. The decline coincided with what a veteran Bloomberg hedge fund reporter called the worst trading stretch he has witnessed in 16 years on the beat, and it forces a question with billions of dollars attached: is the AI trade broken, or did crowded positioning simply unwind?

Nishant Kumar, chief correspondent for hedge funds at Bloomberg News, has covered the industry for 16 years. On Bloomberg's Odd Lots podcast, Kumar said: "In the last 16 years of covering hedge funds, I never saw a day like last week." Equity, macro, credit, and stock-picking funds all lost money together. "This was like a perfect storm. Everyone failed together."

That symmetry matters. Multi-strategy funds, which split capital among many independent trading teams across stocks, bonds, currencies, and commodities under tight risk limits, sell investors one thing above all: steady returns when markets turn rough. Last week they did not deliver it.

How badly did the funds actually fare?

Kumar said these funds are valued for "a track record of making money when the downturn hits. And they all failed together and they lost money."

The numbers back him up:

• Millennium, one of the largest multi-strategy funds, was down 2.3% for October.
• At midyear, Millennium held 12,157,614 Nvidia shares, according to the report.
• Vara, an AI-focused fund, lost 33% in October — yet remained up for the year.

That last figure carries the most information. A fund can lose a third of its value in a single month and still sit on gains for the year only if the AI trade generated enormous profits before it reversed. The drawdown measures the size of the prior run.

Was the selloff mechanical or fundamental?

Michael Ball, macro strategist at Bloomberg News, argued the recent price action reflects plumbing, not narrative. He called the open on the Thursday after the election "a sucker punch because Wednesday you saw people rebuilding positions, you saw volume falling."

Ball's core claim: "the AI trade now has become bigger than the Anthropics and Nvidias," and the latest bounce "was really the pain trade of everyone getting squeezed out of shorts and covering puts." He described the recent sessions as "mechanical versus sort of AI narrative shifting."

Two mechanisms explain the violence of the moves. Short covering happens when traders who sold borrowed shares buy them back, which adds buying pressure. Dealer hedging happens when market makers who sold options buy or sell the underlying stock to stay neutral, which can amplify price swings. The options data shows how crowded the positioning was: on November 10, Nvidia contracts expiring the next day traded 995,528 calls against 827,407 puts.

If Ball is right, the drawdown tells investors little about AI demand and a great deal about leverage and positioning.

What is the bear case against Nvidia?

The bear case rests on two pillars: key-person risk and a capital-expenditure hangover.

On the governance front, Nvidia's board is probing CEO Jensen Huang. On Mad Money on November 10, Jim Cramer said Huang "admitted to a liaison with a woman who is an alleged Chinese spy." As of those remarks, Huang was "still CEO, and he still has the support of NVIDIA's board of directors."

Cramer warned that "we are going to have to consider owning shares in a Jensen-less NVIDIA," adding that "no one, not even Jensen, is irreplaceable and the institution must be preserved." He also cited "a real bench at the company."

Ball acknowledged a real shift in the spending narrative as well: "October really saw that shift in the capex narrative where all of a sudden it wasn't a growth engine anymore and it was about financing, about free cash flow and again about this NIMBYism and electricity problems." Post-election concerns about the 2028 project pipeline added to the pressure on the AI infrastructure buildout.

What do Nvidia's latest numbers say about demand?

Nvidia's most recent reported results argue against the broken-trade thesis. In its Q2 fiscal 2027 filing, Nvidia reported revenue of $96.221 billion, up 105.8% year over year. Data Center revenue rose 117% to $89.023 billion. Supply obligations grew to $279 billion, and Q3 guidance called for $108.0 billion, plus or minus 2%.

On the earnings call, Huang said, "Our demand is much higher than" the roughly 70% fiscal 2028 growth that supply supports. The stock trades at about 23 times trailing earnings — a multiple that leaves room for disappointment but hardly prices in collapse.

So which explanation wins?

The evidence, as laid out in the report, points mostly to a positioning unwind across the broader AI trade. The extra discount on Nvidia reflects key-person risk that the market cannot yet price with any confidence.

Two caveats cut in opposite directions. Demand data from August still showed customers asking for more than Nvidia could supply — but those figures are now months old. October's capex concerns came after them, which means the freshest signal in the record is cautionary.

Nvidia reports earnings on November 17. Ball named compute demand growth as the single most important metric to watch and said it remains on a strong S-curve (a growth pattern that starts slow, accelerates sharply, then flattens). Investors can test that claim directly in the report: if Nvidia's guidance still shows demand exceeding supply, the mechanical explanation holds. A flattening demand curve would confirm the bear case.

The verdict until then: a squeeze collided with a governance scare, and the August demand data — the strongest evidence in the file — has not yet been contradicted by a printed number.