Microsoft beat Nvidia in market value on Tuesday to become the world’s second-most valuable company, the first time since June 2025. By midday, Microsoft’s own stock had dropped more than 3%, and the lead was gone.
The swap came from Nvidia’s pain, not Microsoft’s strength. Nvidia fell more than 6% as its board probes whether CEO Jensen Huang was targeted by foreign intelligence. Microsoft shareholders lost about $130 billion by midday.
How Microsoft Won and Lost the Number 2 Spot
Microsoft was already down 0.4% at $543.25 when it overtook Nvidia. Nvidia had dropped to about $167.
Then Microsoft’s selling deepened. It hit $527.45 at 12:45 p.m. ET, down 3.25%, per Yahoo Finance. Most of the drop came after 12:30 p.m.
That values Microsoft near $3.92 trillion, based on CompaniesMarketCap share data. Nvidia, at $166.83 two minutes later, sat near $4.03 trillion.
Nvidia’s own slide is steep. Barchart data show the stock near $243 in early October. It is now about 31% lower.
What Is Hitting Microsoft Stock?
- First, inflation ran hot.
October consumer prices rose 0.4%, above the 0.3% forecast. The 10-year Treasury yield jumped to 4.93%. Traders now price an 84% chance of a December Fed rate hike.
- Second, Anthropic launched Claude Sheets.
The new product is an AI spreadsheet tool that competes with Excel. It arrived the day Anthropic opened its IPO roadshow.
Here is the twist. Microsoft is among the backers of a $26 billion private placement tied to that IPO.
- Third, AI’s price tag is shrinking.
Anthropic now targets up to $1.02 trillion, down from $1.5 trillion discussed earlier, after Anthropic’s earlier IPO cut.
“What we are seeing is essentially a reassessment of Anthropic’s value in a more challenging AI environment,” Fox reported, citing Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
Nvidia’s board has not said when its review of the Jensen Huang fallout will end. Anthropic has not set a Nasdaq trading date. Both will shape which AI giant holds second place next.
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