AI SELLOFF CONTINUES AFTER BRIEF RESPITE
Chipmakers, widely viewed as one of the biggest beneficiaries of the AI boom, led the selloff with the Philadelphia chips index sliding 1.3 per cent.
Marvell Technology, which Huang called the “next trillion-dollar company” in June, slumped 3.8 per cent. AI hyperscaler Oracle, which is expanding its cloud AI chip deals with Nvidia, shed 2.6 per cent.
Memory chipmaker Micron Technology fell 2.5 per cent and data storage firms Sandisk and Western Digital eased 6 per cent and 3.7 per cent. Photonic product makers Lumentum and Coherent and AI server maker Dell eased between 3 per cent and 5.1 per cent.
Construction and power-generation equipment maker Caterpillar and power producer Vistra slipped about 0.5 per cent each.
Shares of AMD and Broadcom, which also produce AI chips and compete with Nvidia, however, rose 3.7 per cent and 5.6 per cent, respectively, on expectations that the turmoil at Nvidia could create opportunity for rivals.
Other hyperscalers including Alphabet, Amazon.com and Microsoft were also up between 0.8 per cent and 2.7 per cent.
AI stocks struggled and the Nasdaq entered a technical correction earlier this month after the Democrats swept the midterm elections, including in states opposed to data centres, stoking fears tighter regulation could slow the AI build-out.
Tech-heavy stock markets across the globe witnessed jitters. Japan and South Korea closed nearly 0.7 per cent lower. Tech stocks in Europe were also down about 1 per cent.
Nvidia trades at about 12 times its 12-month forward earnings estimates, its lowest since November 2012, according to data compiled by LSEG.
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