What happened 

Shares of Nvidia (NVDA 3.48%) plunged this week after the company's stock received a price target cut, some analysts had a few negative comments about the chip market, and investors worried that comments made from another chip company about slowing demand might mean bad news for Nvidia as well. 

Investors panicked a bit on all this news and sent the semiconductor stock falling 15.3% over the past week.

So what 

Nvidia started off the week with Morgan Stanley warning that there could be a potential slowdown in demand for graphics processors as Ethereum, a leading blockchain and cryptocurrency, switches to a proof-of-stake model and away from its current proof-of-work setup. 

A person appears upset while looking at a computer.

Image source: Getty Images.

The result could be less demand for graphics processors and, as a result, potentially less demand in the short term for Nvidia's chips. 

Investors then drove Nvidia's stock even lower on Wednesday when Bank of America analyst Vivek Arya cut its price target from $270 down to $220 but kept a buy rating on the stock. Arya reminded investors that the chip industry is cyclical and that another downturn in semiconductor demand could be happening soon. 

And finally, Nvidia continued its slide on Friday after another chip company, Micron Technology, reported its third-quarter results. While the company beat expectations, it also said that "the industry demand environment has weakened." 

Micron's revenue and earnings guidance for the upcoming quarter fell below Wall Street's consensus estimates, and Nvidia investors appear to be worried that Micron's warning about weakening chip demand will affect Nvidia as well. 

Now what 

Nvidia investors have been on a roller-coaster ride lately, with the tech stock plummeting 50% year to date. And as investors worry that the U.S. economy could slow down due to the Federal Reserve hiking the federal funds rate to battle soaring inflation, there could be more pain ahead for shareholders over the short term. 

Nvidia investors will get a clearer picture of how the company is doing when it reports its latest quarterly financial results, likely in mid-August.