Nvidia Falls Below $4 Trillion After Hours as Microsoft Reclaims No. 2 Spot

Nvidia lost roughly $362 billion in market value in after-hours trading on Wednesday, dropping below $4 trillion and surrendering the No. 2 spot among U.S. companies to Microsoft, after reports that the board is preparing to oust CEO Jensen Huang.

At 7:59 p.m. ET, Nvidia (NASDAQ:NVDA) traded at $158.76, down $14.97, or 8.62%, from its regular-session close. That close had been strong: $173.73, up $4.84, or 2.87%, for a market value of $4.20 trillion. The stock earlier fell as low as $156.20 around 5:25 p.m., roughly 10.1% below the close.

The selloff followed a story that broke around 5:30 p.m. ET reporting that Nvidia's board is preparing to remove Huang after two affairs. A second report later that evening said the board is working with an outside firm to identify replacements. Nvidia has confirmed neither report, and the stock fell after the first one.

How a $1.40 Move Decides the Ranking

Microsoft (NASDAQ:MSFT) did not rally past Nvidia. It fell less. Microsoft closed down $12.03, or 2.26%, at $521.13 and has lost 6.24% over the past week. In after-hours trading it slipped another 0.12% to $520.50, which values the company at about $3.867 trillion on 7.43 billion shares.

Nvidia has 24.15 billion shares, so the after-hours price of $158.76 values the company at about $3.834 trillion. That leaves Microsoft ahead by about $33 billion — a gap equal to roughly $1.40 per Nvidia share.

At Wednesday's close, Nvidia led Microsoft by about $324 billion. The order could flip either way at the 9:30 a.m. ET open on Thursday.

Apple (NASDAQ:AAPL) remains first. It closed at a record $355.63, up 2.04%, valuing the company at $5.17 trillion, and then traded at $356.13 after hours. Alphabet (NASDAQ:GOOG, GOOGL) rose 2.11% to $293.45, a value of $3.61 trillion.

The arithmetic of the ranking is straightforward. Nvidia falls below $4 trillion at any price under $165.63, and it falls behind Microsoft below $160.14. If Nvidia closes Thursday near its after-hours price, it would post its lowest close since July 7, 2025, when the stock ended at $158.24.

What Do the Downgrades Say?

Two analyst downgrades landed around the same day. Baird cut Nvidia to Neutral on Wednesday morning. That evening, Bernstein downgraded the stock to Market Perform from Outperform and lowered its price target to $200 from $400.

The downgrades arrived despite strong reported numbers. In its fiscal second quarter, Nvidia's revenue rose 105.8% to $96.22 billion, and management guided to $108 billion for the third quarter. The company's next earnings report is expected Tuesday, November 17, after the close.

Bullish investors point to three supports: customer demand exceeds the supply Nvidia can deliver, Vera Rubin production is ramping up, and a trailing price-to-earnings ratio of about 35x is reasonable for a company that just more than doubled its revenue.

The real risk is governance. A forced exit of the CEO could worry partners, and that risk now sits on top of an existing debate about AI capital spending.

Why Nvidia's Fate Is Tied to Microsoft's Budget

Microsoft is one of Nvidia's largest customers. It spent $39.37 billion on capital expenditures last quarter, docked its first Vera Rubin GPUs, and is scaling up its own Maia chips.

The two companies' interests diverge at the margin. If AI spending slowed, Microsoft's margins would benefit, while Nvidia's growth would suffer. Microsoft offers investors a comparison point: it trades at a P/E of about 29x and has $677 billion in commercial remaining performance obligations — signed revenue it has not yet recognized.

This year the two stocks have moved in opposite directions. Microsoft is up 8.44%. Nvidia is down 6.63%. Both rank among the largest index weights, so index fund investors own both companies, and the reshuffle at the top of the market's leaderboard flows directly into those portfolios.

What Happens Next

Reclaiming second place starts with a Thursday close above $160.14. The next test is the November 17 earnings report, where management must show whether the demand it has guided to — $108 billion in third-quarter revenue — can outweigh a leadership crisis that the company has not addressed publicly.

For a company whose chips underpin most of the industry's AI infrastructure, the stakes extend beyond one ranking: Nvidia's $4 trillion valuation has rested on investors' confidence that its growth and its governance will both hold.