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    • Nvidia shares lose 5 billion amid chip stock sell-off: What’s behind the worst day in six weeks?
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    Nvidia shares lose $175 billion amid chip stock sell-off: What’s behind the worst day in six weeks?

    Vaseline Posted on

    Topline

    Fresh from a record high, Nvidia shares fell on Tuesday as part of a slump in semiconductor chip stocks with an unusual impetus: a less-than-stellar earnings release from a Dutch company that accidentally came out earlier than expected.

    Key facts

    Shares of Nvidia fell 4.5% in Tuesday trading, wiping out about $155 billion in market capitalization for the California company, more than AT&T’s total market value of $154 billion.

    Nvidia shares posted their biggest daily loss since the 10% drop on September 3, which at $279 billion marked the biggest single-day erosion of a single company’s market capitalization in history.

    Shares of several other companies involved in designing and manufacturing the semiconductor technology powering the generative AI explosion also fell, with shares of Advanced Micro Devices, Arm Holdings and Broadcom down at least 3.5%.

    Surprising fact

    The dip in chip stocks in the United States came after Dutch company ASML, which makes much of the equipment used to make the high-tech AI chips and works closely with Nvidia, reported profits a day earlier than expected due to what the company attributed to a “technical error”. .” The unexpected release included a warning of “more gradual” growth for ASML, which said it expects revenues to be between $32.7 billion and $38.1 billion in 2025, well below consensus expectations of $39.1 billion. ASML’s New York-listed American depositary receipts lost 17.5% in Tuesday trading, the biggest loss since March 2020 and the second-worst day of the past decade for the stock.

    Important background

    With a market capitalization of $3.2 trillion, Nvidia remains the world’s second-largest company, behind only $3.5 trillion iPhone maker Apple, which hit its highest share price ever on Tuesday morning. After finishing as the S&P 500 index’s best-performing stock in 2023 with a blistering 239% gain, Nvidia is once again the biggest winner yet in 2024, with a 167% gain. The increase comes as Nvidia reports exponential profit growth thanks to “insane” demand for its graphics processing units, the semiconductor technology that powers generative AI applications at companies like Meta and Tesla. Jensen Huang, CEO of Nvidia since he co-founded the company in 1993, is the 11th richest person in the world, according to Forbes estimates, thanks to his 3.5% stake in Nvidia. Huang’s net worth fell by $5 billion following Tuesday’s dip.

    Read more

    ForbesNvidia shares soared 2% to a closing record, as the company closed in on AppleBy means of Ty Roush

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