Nvidia closed at $181.60 on November 5, down 9.3% in a single session, as Democratic gains in the US midterm elections raised concerns about potential restrictions on AI data center development, sending the entire AI infrastructure complex into a tailspin. The Nasdaq plunged 5.5%, its worst day since April 2025, while the Philadelphia Semiconductor Index fell about 12%. Nvidia lost nearly $450 billion in market cap. As of this morning, the stock sits about 24% below its October peak.

None of that reflects what the company is actually doing.

Why This Stock Now

The selloff was driven by fears that a Democratic-controlled Congress would restrict data center permitting. Morgan Stanley analysts said the election of Democrat Amy Acton as governor creates a significant risk of data center project delays in Ohio. Those concerns are real. But the selloff is driven by near-term data-center approval risk, and AI compute demand doesn’t disappear when capacity gets delayed rather than canceled. What the selloff has done is hand investors a 24% discount on a company reporting fiscal third-quarter earnings in eight days.

The Business

In fiscal second-quarter 2027, Data Center revenue was $89.0 billion, up 117% from a year ago and up 18% sequentially, driven by the ramp of Blackwell Ultra infrastructure and demand for networking. Gross margin was 75%. The chipmaker has topped its own revenue forecast every quarter for over two years, with fiscal second-quarter 2027 revenue coming in at $96.2 billion, up 106% year over year, well above the $89.0 billion it had guided.

What Is Driving the Opportunity

For the fiscal third quarter, Nvidia is forecasting revenue of approximately $108 billion, representing another substantial increase from about $57.0 billion a year earlier. Wall Street consensus estimates vary by source and change daily, but the market broadly expects revenue around $108 billion and EPS around $2.47. Jensen Huang has talked about the economics of “AI factories” at the gigawatt scale, but specific claims about Vera Rubin generating a set number of revenue dollars per gigawatt are not something the company has pinned down as a single, stable figure. With a trailing EPS of $7.91 and a P/E ratio around 23.6, NVIDIA’s earnings are expected to grow roughly 70% next year based on common aggregator estimates.

What Could Go Wrong

Post-earnings drops are almost routine. Expectations are high, and the bar keeps rising. The combination of rising interest rates, ballooning capital needs, and the Democratic sweep in Congress has led to increased fears that wide swaths of the market are going to be weighed down by too much debt and too little revenue. Any cautious commentary from management on November 17 could weigh on the stock regardless of the revenue line.

The Bottom Line

A 24% decline built on political sentiment, not company fundamentals, is the entry point. On Nov. 17, Nvidia will publish its third-quarter earnings results, and this event has huge implications for the whole stock market. The report will either confirm that the AI buildout is resilient enough to absorb a permitting slowdown, or it will introduce genuine uncertainty into the thesis. At current prices, that asymmetry deserves serious consideration.

The permitting risk that triggered the selloff points to a deeper structural constraint. Power grid capacity, not chip supply, is increasingly the binding limit on how fast AI infrastructure can actually scale.