Nvidia shares fell by more than 8% on Thursday, leading the tech-heavy Nasdaq Composite down 2.8%. The stock’s decline also affected fellow chipmakers Broadcom and Micron, with both falling over 6%. The PHLX Semiconductor Index dropped 6%, as investor concerns about excessive AI spending took hold.
Despite surpassing Street expectations in its earnings report on Wednesday, Nvidia’s data center revenue – a proxy for AI demand – nearly doubled from the same quarter last year. However, investors’ confidence was shaken, and shares saw-sawed between gains and losses during extended trading.
Options pricing predicted significant post-earnings stock moves, with shares either rising or falling 8% by the end of the week. Thursday’s selloff showed that Nvidia’s results were not enough to calm investor fears about economic conditions and AI spending. Richly-priced AI stocks continued their downward trend, including Super Micro Computer, which plummeted 16%, and Palantir, which slid 5%.
Source: https://www.investopedia.com/nvidia-earnings-spark-chip-ai-stock-selloff-update-11687937