Nvidia (NVDA) shares extended their decline on Friday, falling roughly 1.5% to $192.35 in early trading, as a broad technology selloff continued to weigh on artificial intelligence stocks. The chipmaker is now on track for its steepest weekly drop since April 2025, with losses exceeding 9% for the week.
The decline pushed Nvidia below the psychologically important $200 support level, which it had reclaimed earlier in March 2026 after a prior downturn. The breach of that threshold earlier this week signaled growing investor unease about the sustainability of AI infrastructure spending and intensifying competition in the chip market.
Tech Selloff Persists Amid AI Valuation Reassessment
The broader market showed mixed performance on Friday. The S&P 500 hovered near the flatline, while the Nasdaq Composite slipped 0.3%. The Dow Jones Industrial Average was little changed. Semiconductor stocks remained under particular pressure as investors continued to reassess valuations across the AI sector following years of extraordinary gains.
At the heart of the selloff is a growing debate over whether the massive capital expenditures by technology companies on AI infrastructure will generate sufficient returns. A New York Times report that OpenAI is considering delaying its initial public offering until next year, citing volatility in AI-related stocks and the recent performance of newly listed SpaceX, added to the cautious tone.
For more on how Nvidia is navigating the competitive landscape, see Nvidia Rises 2% as Meta's Custom AI Chip Seen as Complement, Not Threat.
OpenAI and Broadcom Unveil Custom Chip
Competitive pressures intensified this week after OpenAI and Broadcom unveiled a custom artificial intelligence chip called Jalapeño. The processor, OpenAI's first internally developed AI chip, is designed primarily for inference workloads—serving AI models to users through products like ChatGPT.
OpenAI President Greg Brockman told CNBC that the chip was developed with assistance from the company's own AI models, noting, "The degree to which our models have been able to accelerate it was very surprising to us." According to Brockman, the chip was designed from end to end in approximately nine months.
The announcement underscores a broader industry trend as hyperscalers, AI laboratories, and major technology companies seek greater control over their computing infrastructure through custom silicon. For more on Broadcom's broader push into Nvidia's territory, read Broadcom's Tomahawk 6 Targets Nvidia's Networking Stronghold in AI Data Centers.
Nvidia Still Dominant, but Investor Caution Grows
Despite the mounting headwinds, Nvidia remains the dominant supplier of AI accelerators, powering many of the world's largest AI systems. Customers have already committed to deploying the company's next-generation platforms. However, investors are increasingly focused on whether Nvidia can maintain its market share as custom chips gain traction and large customers diversify their hardware strategies.
For now, there is little evidence that Nvidia's business has been materially affected by the competitive developments. Yet the combination of elevated valuations, questions around AI spending, and rising competition has made investors more cautious. That caution has left Nvidia searching for support after slipping below $200, facing one of its most challenging weeks since the AI-driven rally began.
For additional context on how Nvidia's peers are performing, see Intel and AMD Surge Past Nvidia in H1 2026: Can the Momentum Last Into H2?.
This article is for informational purposes only and does not constitute financial advice.
