rapid ascent of the artificial intelligence theme are experiencing a hiccup as shares of Nvidia and other major players slip after a powerful rally.briefly reached a US$1-trillion market cap
earlier this week. The stock’s 250%-plus gain from an October low likely provided an attractive opportunity to pocket some gains, with board member Tench Coxe among people who recently took some money off the table. AI software firm C3.ai fell 9% on disappointing sales forecast, paring its gain for the year to just under 260%.
Wall Street has been obsessed with everything AI this year, with Nvidia’s blowout revenue forecast adding fuel to the frenzied rally. But lofty valuations — Cathie Wood says it’sCracks appeared in Asia as well, with Taiwan’s TSMC on track for a third straight day of losses Cracks appeared in Asia as well, with Taiwan’s TSMC on track for a third straight day of losses while Tokyo-listed Advantest and South Korea’s SK Hynix were down for a second day. Shares of the three Nvidia suppliers have climbed this year amid the AI buying frenzy.
Even after its latest dip, Nvidia is trading at 23 times estimated sales for the current year. That compares with less than 15 times for both Lattice Semiconductor, which has the second highest valuation on the Philadelphia Semiconductor Index, and C3.ai, the small cap whose ticker is “AI”.co-founder and CEO Jensen Huang, whose personal fortune has grown by $20-billion this year, says companies that refuse to take full advantage of the opportunities provided by AI “will perish”.