- Chip companies led by market cap leader Nvidia were set to extend losses on Wednesday after a bruising sell-off in the previous session, reflecting the growing concern on Wall Street over the stocks' lofty valuations as AI optimism cools.
Worries around a slow payoff from hefty AI investments have mounted, and Nvidia's forecast last Wednesday fell short of lofty expectations even though the company posted strong quarterly revenue growth. Since peaking on June 18, Nvidia's shares have lost roughly 20% of their value. Its forward price-to-earnings ratio now sits just below 30, representing a decline in its valuation. The stock, however, is up more than 650% since the start of 2023.
"Nvidia is not only the biggest player in the AI chips market, but it is also invested in a large number of other AI companies which means its fingers are in multiple pies," said Dan Coatsworth, investment analyst at AJ Bell. Cyclacel Pharmaceuticals Announces Participation at the H.C. Wainwright 26th Annual Global Investment Conference
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