NVIDIA co-founder and CEO Jensen Huang shows off the new Blackwell GPU chip at the NVIDIA GPU Technology Conference in San Jose, California, on March 18, 2024.
David Paul Morris/Bloomberg via Getty Images
Nvidia The chipmaker’s market capitalization fell 9.5% on Tuesday, pushing its stock price down to just under $300 billion.
Intel It’s down almost 8%. Marvel It fell 8.2% Broadcom I lost about 6%. SDHD Co., Ltd. It fell by 7.8%. Qualcomm The VanEck Semiconductor ETF (SMH), an index that tracks semiconductor stocks, fell 7.5%, its worst day since March 2020.
Markets were slumped on Tuesday after the ISM manufacturing index reported August numbers that fell short of consensus expectations, raising concerns about the strength of the economy and increasing the likelihood that the Federal Reserve will cut interest rates.
Chip stocks have rallied over the past year on optimism that the artificial intelligence boom will require companies to buy more semiconductors and memory to meet the growing computing demands of AI applications.
The sector is led by Nvidia, which dominates the AI ​​data center chip market. The stock is still up 118% in 2024.
Other chip companies are also racing to jump into the growth. Intel and AMD are selling AI chips, but so far their market penetration is limited. Broadcom is Google’s Qualcomm, which is developing a TPU chip, is promoting its chip as being best suited for running AI on Android phones.
Last week, Nvidia reported $30 billion in revenue for the quarter ending in July, beating Wall Street’s already-high expectations. Revenue from the company’s data center business, which includes AI processors, rose 154% year over year, partly fueled by a handful of cloud and internet giants that buy billions of dollars’ worth of Nvidia chips each quarter.
Nvidia said it expects revenue to grow 80% in the current quarter.
Some investors saw Nvidia’s forecast as disappointing, briefly hurting chipmakers that supply the company with memory and other components.
Intel announced a new laptop processor Tuesday that can run AI programs on the device itself instead of relying on servers in the cloud. Broadcom, which partners with big companies to develop custom AI chips, reports third-quarter earnings on Thursday.
