Jensen Huang, co-founder and CEO of NVIDIA, demonstrates Blackwell's new graphics processing chip during the NVIDIA Graphics Technology Conference in San Jose, California, on March 18, 2024.
David Paul Morris/Bloomberg via Getty Images
Nvidia Apple Inc. shares fell 9.5% on Tuesday, wiping nearly $300 billion off the chipmaker's market value and dragging chip stocks down with them.
Intel It decreased by about 8%, Marvel Down 8.2% Broadcom Lost about 6%. AMD It decreased by 7.8% and Qualcomm The VanEck Semiconductor Index (SMH), an index that tracks semiconductor stocks, fell 7.5%, its worst day since March 2020.
Markets were sluggish on Tuesday after the ISM manufacturing index reported August figures that came in below consensus expectations — raising concerns about the strength of the economy but also potentially increasing the chances of a Federal Reserve rate cut.
Chip stocks have soared in the past year on optimism that the AI boom will require companies to buy more semiconductors and memory to keep up with the growing computational demands of AI applications.
Nvidia, the dominant player in the AI data center chip market, led the sector, and the stock is still up 118% through 2024.
Other chip companies are competing to capitalize on the growth. Intel and AMD sell AI chips, though they have limited market penetration so far. Broadcom and Intel are developing AI chips. Google TPU chips, Qualcomm promotes its chips as the best for running AI on Android phones.
Last week, Nvidia reported revenue of $30 billion for the quarter ended in July, beating Wall Street’s already high expectations. Revenue from the company’s data center business, which includes AI processors, surged 154% year over year, boosted in part by a handful of cloud and internet giants that buy billions of dollars of Nvidia chips each quarter.
Nvidia said it expects sales to grow 80% in the current quarter.
Some investors saw Nvidia's forecast as disappointing, as it briefly affected chipmakers that supply the company with memory and other parts.
Intel on Tuesday announced new processors for laptops that can run artificial intelligence programs on the device itself, rather than relying on servers in the cloud. Broadcom, which works with large companies to develop custom AI chips, reported third-quarter earnings on Thursday.
