Analyzing NVIDIA’s Stock Market Reaction Following the Launch of ChatGPT

Abstract

This study employs an event study methodology to thoroughly analyze the short-term and long-term impact of ChatGPT’s launch on NVIDIA’s stock price. The findings reveal that the initial release of ChatGPT significantly boosted market enthusiasm for investing in NVIDIA, driven by its central role in AI computing infrastructure (e.g., surging demand for GPUs), which propelled short-term stock price gains. However, in the long run, NVIDIA’s stock performance is constrained by multiple factors, including intensified industry competition (e.g., technological catch-up by rivals like AMD and Intel), uncertainties in AI technology iteration, and market skepticism about the sustainability of computing demand. Additionally, macroeconomic fluctuations and geopolitical risks have influenced long-term investor expectations. This case highlights the nonlinear relationship between technological breakthroughs and capital market reactions, underscoring the tension between short-term sentiment and long-term fundamentals in the valuation of AI-related stocks. The research findings provide valuable insights for investors analyzing the valuation logic of technology-driven companies and offer empirical evidence for policymakers to understand the interplay between the AI industry and capital markets. Future research could further quantify the differential impact of technological milestones on various segments of the industry chain across different event windows.