Microsoft Briefly Overtakes Nvidia in Market Cap, Then Drops

On Tuesday, Microsoft overtook Nvidia in market capitalization, claiming the position of the world's second most valuable company for the first time since June 2025. But by midday, shares of Microsoft had fallen more than 3%, and the advantage vanished.

The change in ranking resulted from Nvidia's difficulties rather than Microsoft's performance. Nvidia's stock declined over 6% amid a board investigation into whether CEO Jensen Huang was the subject of foreign intelligence targeting. Microsoft investors saw roughly $130 billion in market value erased by midday.

How Microsoft Won and Lost the Number 2 Spot

When Microsoft took the lead, its shares were already 0.4% lower, trading at $543.25. Nvidia's stock had fallen to around $167.

Selling pressure on Microsoft then intensified. By 12:45 p.m. ET, the stock reached $527.45, a decline of 3.25%, according to Yahoo Finance. The majority of the loss occurred after 12:30 p.m.

Based on CompaniesMarketCap data, Microsoft's valuation stood at roughly $3.92 trillion. Two minutes later, Nvidia's stock at $166.83 gave it a market cap near $4.03 trillion.

Nvidia's downturn has been sharp. According to Barchart data, the stock was around $243 in early October. It currently sits approximately 31% below that level.

BREAKING 🚨: Nvidia $NVDA has now erased $1.75 Billion of market cap over the last month 📉 📉 Nice work Jensen 🤦 pic.twitter.com/mFhGowOBXq

— Barchart (@Barchart) November 10, 2026

What Is Hitting Microsoft Stock?

• The first factor was elevated inflation.

Consumer prices in October climbed 0.4%, exceeding the 0.3% that economists had predicted. The yield on the 10-year Treasury note surged to 4.93%. Market participants now see an 84% probability that the Federal Reserve will raise rates in December.

• Another factor was Anthropic's release of Claude Sheets.

This AI-powered spreadsheet application directly rivals Microsoft Excel. The launch coincided with the first day of Anthropic's IPO roadshow.

Microsoft $MSFT -3%

Anthropic launched Claude Sheets today to take on Excel, plus Claude Meetings, an AI assistant that joins video calls, follows discussions and starts working on tasks while you're still talking.

Claude Meetings works with Google Meet at launch. https://t.co/6SPtHe9QDa pic.twitter.com/ws6hGbN4gf

— Wall St Engine (@wallstengine) November 10, 2026

Notably, Microsoft is one of the investors in a $26 billion private placement linked to Anthropic's IPO.

• The third issue is the diminishing valuation of AI.

Anthropic's target valuation is now up to $1.02 trillion, lower than the $1.5 trillion previously mentioned, following a reduction in its IPO expectations.

“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.

The Nvidia board has not disclosed a timeline for completing its review of the Jensen Huang situation. Anthropic has yet to announce a date for its Nasdaq listing. These two developments will influence which AI company occupies the number two spot going forward.