Part of NVidias valuation was due to the perception that AI companies would need lots and lots of GPUs, which is still true. But I think the main problem causing the selloff was that another part of the popular perception was that NVidia was the only company who could make powerful enough GPUs. Now it has been shown that you might not need the latest and greatest to compete, who knows how many other companies might start to compete for some of that market. NVidia just went from a perceived monopolist to "merely" a leading player in the AI supplier market and the expected future profits have been adjusted accordingly.