The US chip manufacturer Nvidia has lost more value in one day than any other US company before. Investors are becoming increasingly doubtful. Are expectations about the artificial intelligence business exaggerated?
US chip manufacturer Nvidia has once again set a record – but this time it’s a negative one: The market value of the artificial intelligence (AI) specialist fell by $279 billion yesterday. No US company has ever lost so much market value in one day.
The US company’s shares fell by 9.5 percent yesterday. The market capitalization fell to 2.4 trillion US dollars – after Nvidia had broken the three trillion dollar mark for the first time in early June and temporarily became the most valuable company in the world. At that time, Nvidia had even overtaken Apple and Microsoft.
The sell-off in chip stocks did not leave the major indices in the USA unscathed: The technology-heavy Nasdaq fell 3.3 percent to 17,136.30 points, while the PHLX chip index lost 7.8 percent. That was its biggest daily decline since 2020. The VIX fear barometer, which measures the expected volatility of the S&P 500, shot up. Investors fled stocks and headed for the safe haven of US government bonds.
Key technology on the topic of AI
In recent months, it has been primarily the chip companies that have been making record profits. In the second quarter of this year alone, Nvidia was able to more than double its sales and profits.
This was also reflected in the stock markets: After all, the Nvidia share price had almost tripled this year alone until its record high in the middle of the year, and has even quadrupled since 2023 – mainly thanks to the excitement surrounding the topic of artificial intelligence. Nvidia’s graphics chips are particularly powerful and are considered a key technology for the AI business. In addition, the group recently benefited from sales of associated software and services.
Already Quarterly forecast burdened
So has the AI craze suddenly come to an end? Observers interpreted the recent losses as a sign that investors are becoming more cautious about AI technologies. Last week, Nvidia presented a quarterly forecast that did not meet investors’ high expectations.
After the figures were presented, Nvidia shares came under pressure in after-hours trading and initially lost seven percent. Market experts paid particular attention to the statements about the new Blackwell processor generation. They were disappointed that Blackwell still needed to be reworked.
In addition, there were disappointing economic data from the US and weak sales figures from the US semiconductor industry yesterday. The experts at Morgan Stanley wrote that these data were weaker than the bank had expected across almost all product lines. The concern that the high investments in AI could only pay off slowly has already weighed on the most valuable companies on Wall Street in recent weeks and was evident again yesterday.
“Trade is completely distorted”
“So much money has flowed into technology and semiconductor stocks over the past 12 months that trading is completely distorted,” said Todd Sohn, ETF strategist at Strategas Securities. Experts at fund provider BlackRock wrote in a note to clients yesterday that some recent studies cast doubt on whether revenues from AI alone would justify the wave of investment in the technology.
“Risk aversion is taking over,” said Dec Mullarkey, managing director at SLC Management. He added that investors were particularly cautious ahead of critical data on the strength of the labor market, which is due to be released on Friday. “Nobody wants to be on the wrong side of what’s happening with payrolls,” he said.
US antitrust watchdogs have questions for Nvidia
There is more bad news for Nvidia: The financial news agency Bloomberg reported after the close of trading that the chip company’s dominance in chips for artificial intelligence had put it in the sights of American competition authorities, according to informed sources. The US Department of Justice has requested information from Nvidia and other companies with legally binding requests, the financial service reported. The share price fell by a further 2.4 percent in after-hours trading.
With information from Lilli-Marie Hiltscher, ARD finance department