Nvidia, chip stocks waver after previous day’s sell-off

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Nvidia News

Decline,Company,Valuation

Drop reflects growing concern on Wall Street over the stocks’ lofty valuations as AI optimism cools

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.) fell 1.6% in premarket trading after Tuesday’s 9.5% decline wiped out $279 billion from its market value, the biggest ever single-day decline for a U.S. company.

Other chip stocks, including Arm Holdings , Micron Technology, Qualcomm and Broadcom , were down between 0.5% and 1.5% on Wednesday in premarket action. U.S.-listed shares of TSMC, Nvidia’s chip manufacturing partner, slid 1.5%. “The whole AI development...is very promising. It’s just the question of ... how are companies going to monetise all this development, how do we justify all this capex that is going in right now? Investors are just waiting for that answer.”

“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.

 

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