Technology
Tuesday, June 25th, 2024 4:55 pm EDT
Key Points
- Volatile Trading and Recovery: Global semiconductor stocks experienced volatility on Tuesday, influenced by a significant slump in Nvidia’s shares over the previous three sessions. Nvidia’s shares had lost over $500 billion in market capitalization but started to recover, rising around 5.5% by Tuesday 11:40 a.m. ET.
- Impact on European and Asian Markets: European semiconductor firms, including STMicroelectronics and ASML, and Asian firms like MediaTek and Samsung, saw varied reactions. While STMicroelectronics ended down 1.4%, ASML recovered to close up 0.18%. In Asia, MediaTek’s shares fell 1.8%, and Samsung’s dropped 0.3%, though TSMC and SK Hynix managed to rise.
- Nvidia’s Market Position and Future Prospects: Despite recent declines, Nvidia maintains high demand for its AI GPUs, with major tech companies investing heavily. Nvidia, having briefly surpassed Apple and Microsoft in market value, is set to ship its next-generation AI chips, Blackwell, later this year, potentially sparking significant growth.
Global semiconductor stocks experienced volatile trading on Tuesday following a significant drop in Nvidia’s shares during the previous session. This decline had a ripple effect on semiconductor firms in Europe and Asia. Shares of Nvidia, a major player in the semiconductor industry, lost over $500 billion in market capitalization across three trading days. However, some recovery was noted as Nvidia’s shares rose by approximately 5.5% by Tuesday 11:40 a.m. ET.
In Europe, Switzerland-based semiconductor firm STMicroelectronics saw its shares end the day down by more than 1.4%. Dutch chip equipment giant ASML, a crucial entity in the global semiconductor market, initially experienced losses but closed up 0.18% as Nvidia shares recovered. ASML manufactures extreme ultraviolet lithography (EUV) machines essential for making integrated circuits. French semiconductor materials manufacturer Soitec’s shares slipped 0.1%, while ASMI, another key player, climbed 0.6% after an earlier decline. Overall, the pan-European Stoxx 600 index closed approximately 0.3% lower.
In Asia, the semiconductor market also showed volatility. Taiwanese chip firm MediaTek’s shares dropped by 1.8%, and South Korea’s Samsung saw a slight decrease of 0.3%. Conversely, Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest chipmaker, and South Korean firm SK Hynix avoided the negative trend, with their shares rising 0.5% and 0.9%, respectively.
The rebound in Nvidia’s shares came after a sharp decline over three consecutive sessions, marking a 13% drop from Thursday’s all-time highs. On Monday, Nvidia experienced its second-steepest drop of the year, closing down by 6.7%. However, early trade on Tuesday indicated a recovery. Last week, Nvidia had surpassed Apple and Microsoft to become the most valuable U.S. company, reaching a market capitalization of over $3.4 trillion. By the end of Monday, Nvidia had lost more than $540 billion in market value from its intraday record on Thursday.
Despite these fluctuations, Nvidia maintains that the demand for its artificial intelligence graphics processing units (GPUs) remains high. Major technology companies like Microsoft, Google, Amazon, Oracle, and Meta are investing billions in Nvidia’s chips to enhance their data centers and cloud services. Nvidia’s future prospects appear promising as the company prepares to ship its next-generation AI chips, named Blackwell, later this year. Analysts predict that these new chips could initiate another significant growth phase for Nvidia and its partners, potentially stabilizing and boosting its market performance.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/06/25/nvidia-nvda-stock-rout-leaves-global-chip-shares-volatile.html
