NVIDIA Corporation (NVDA  )'s second-quarter report was viewed of the most important earnings prints in recent memory and a gauge for how the overall stock market could perform going forward.

The company beat earnings and revenue estimates, but investors retreated in the aftermath, wiping away a huge amount of valuation from the chip stock.

Nvidia's Rock Star Status: Nvidia has been one of the hottest large-cap stocks over the last year, thanks to its incredible growth from the artificial intelligence sector.

With high expectations and a history of beating analyst estimates, investors and analysts turned their attention to the company's second-quarter earnings report and conference call, complete with some watch parties in big cities.

The company's beat and commentary were ultimately not big enough to drive the stock higher.

Nvidia stock closed at $125.61 on Wednesday, Aug. 28 ahead of the earnings report. On Tuesday, shares are trading at $109.04, down 13.4% in three trading days.

Based on 24.53 billion Nvidia shares outstanding, this represents a loss of $413.1 billion in Nvidia's market capitalization over the last three trading sessions.

For comparison, that $413.1-billion drop is greater than the combined value of several of the most well-known companies worldwide:

Add the value of those three companies up and you have $409 billion, which is less than the amount of value erased from Nvidia over the last three trading days.

Why It's Important: Nvidia shares have soared in value thanks to its impressive earnings reports, strong guidance and backlog of demand.

While the second-quarter earnings report beat estimates, there were several less than positive takeaways: investors and analysts are now seeing the company beat estimates and grew revenue at lower rates than in past quarters. In essence, the beats are getting smaller and smaller.

Other concerns include margins and potentially lower growth rates in upcoming quarters.

Analysts were mixed in their sentiment after the earnings report, with many seeing the sell-off as a potential buying opportunity for long-term investors.

For Nvidia, the rise of the stock may have been too much all at once. It was just last May that the company passed the $1-trillion market capitalization milestone for the first time. The company went on to pass the $2-trillion and $3-trillion valuation levels and for a short time this year became the most valuable company in the world at $3.33 trillion.

Nvidia is expected to report third-quarter financial results in November. The question will be whether shares can recover before then and if the next earnings report will be as hyped as the recent second-quarter report.

NVDA Price Action: Nvidia shares are trading at $109.04 versus a 52-week trading range of $39.23 to $140.76. Despite the short-term valuation loss, the stock is up 126% year-to-date in 2024.