NEW YORK: Some of the shine is wearing off shares of Nvidia and other US semiconductor companies after a stunning 2023 rally, as investors weigh steep valuations, rising Treasury yields and signs of industry unease.
“They have definitely lost some momentum," said King Lip, chief investment strategist at Baker Avenue Wealth Management. “Many of these chip names got that AI boost. Some of that fervor has kind of simmered down.” Valuations are coming under further pressure from the rise in Treasury yields. Higher yields on Treasuries - which are seen as virtually risk free - offer investment competition to equities, viewed as a riskier asset class.
Interest in the AI sector from retail investors is also waning, according to VandaTrack, which tracks retail activity.