The onset of AI has clearly been a fortuitous development for Nvidia, as well as for other companies cemented in the AI industry. But there's rarely a linear path for companies even in such promising markets, and we see hints of this now with Nvidia's and other AI companies' share prices starting to drop., share prices have dropped for a number of tech companies in both the US and Asia. This includes Nvidia, which has seen its shares drop by 6.8%.
And we should certainly remember this when we hear talk of share prices falling. Nvidia is still the AI titan it was last month, as are the other AI companies now seeing downturn. To take another example, the BBC tells us chip maker SK Hynix is one of the Asian companies to see its shares drop, but we also see that it's just had its highest quarterly profits since Q3 2018. This is thanks, in part, to demand for high bandwidth memory , which it happens to sell to Nvidia.
Of course, companies shouldn't be considered in a vacuum, either. This downturn seems to apply to the AI industry across the board, suggesting broader market concerns. According to the BBC, Jun Bei Liu, Portfolio Manager at Tribeca Investment Partners, says that"investors are now becoming more concerned about all this expenditure with AI without the revenue benefit" which"simply means investors will focus more on returns in this space than just buying the whole sector.
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Source: FT - 🏆 113. / 51 Read more »