Global chip stocks experience volatility following Nvidia’s loss of half a trillion dollars.

Global chip stocks experience volatility following Nvidia’s loss of half a trillion dollars.



Global semiconductor stocks experienced a turbulent day of trading on Tuesday following a sharp drop in the shares of Nvidia, the American chip-making giant. The market reaction to Nvidia’s loss of over $500 billion in market capitalization over three trading days led to declines in chip companies in Europe and Asia initially. However, Nvidia’s shares rebounded by 5.5% on Tuesday, prompting some recovery in other semiconductor stocks.

In Europe, Swiss-based STMicroelectronics saw its shares drop more than 1.4%, while ASML, the Dutch chip equipment giant, initially fell but closed up 0.18% as Nvidia’s shares recovered. ASML, a key player in the global semiconductor industry, manufactures and sells EUV lithography machines used in IC production. Soitec saw a 0.1% decline, while ASMI rose 0.6% after earlier losses. The pan-European Stoxx 600 Index closed around 0.3% lower.

Asian semiconductor stocks also experienced a volatile trading day, with Taiwanese company MediaTek’s shares falling 1.8% and South Korean firm Samsung dropping 0.3%. On the other hand, TSMC, the world’s largest chipmaker, and SK Hynix managed to avoid the negative sentiment, with both seeing gains of 0.5% and 0.9%, respectively.

Nvidia’s shares had experienced a significant decline over three consecutive trading sessions, falling 13% from its all-time high on Thursday. Despite closing down 6.7% on Monday, the second steepest decline of the year, Nvidia’s shares began to recover on Tuesday. Last week, the company briefly surpassed Apple and Microsoft as the most valuable American company with a market capitalization of over $3.4 trillion. However, by the end of Monday, Nvidia had lost over $540 billion of its market value since hitting its intraday record. The company emphasized that demand for its AI GPUs remains strong, with major tech companies like Microsoft, Google, Amazon, Oracle, and Goal purchasing billions of dollars worth of its chips for their data centers and cloud services.

Nvidia is set to launch its next-generation AI chips, known as Blackwell, later this year, which analysts believe could fuel significant growth for the company and its partners. Overall, global semiconductor stocks faced fluctuations amid the market reaction to Nvidia’s recent performance, with some companies managing to recoup losses as Nvidia’s shares showed signs of recovery.

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https://www.cnbc.com/2024/06/25/nvidia-nvda-stock-rout-leaves-global-chip-shares-volatile.html