NVIDIA pours cold water on the AI boom, Asian chip stocks fall in unison
NVIDIA's latest performance outlook fell short of analysts' expectations, leading to a decrease in investor confidence and a general decline in Asian semiconductor stocks. Despite revenue exceeding expectations in Q2, guidance for the future was lower than expected, coupled with production obstacles, causing its stock price to drop more than 8% in after-hours trading. Companies like SK Hynix, Advantest, and TSMC also experienced significant declines in their stock prices. The overall market sentiment was affected by this, intensifying investors' concerns about the AI boom, but analysts remain optimistic about NVIDIA's prospects
According to the Zhitong Finance and Economics APP, chip manufacturer NVIDIA (NVDA.US) announced that its performance outlook did not meet analysts' highest expectations, cooling investors' confidence in AI trading, leading to a decline in Asian semiconductor stocks.
After the U.S. market closed on Wednesday, NVIDIA released its second-quarter financial report. Despite doubling the expected revenue growth in Q2, the guidance for the next quarter did not meet the highest expectations of Wall Street analysts. In addition, news that its Blackwell chip production faced obstacles caused the chip maker to drop more than 8% in after-hours trading.
Among NVIDIA's suppliers, South Korean memory manufacturer SK Hynix saw a sharp drop of 6.8% in its stock price, Japanese test equipment manufacturer Advantest fell by 3.6%, and leading foundry TSMC (TSM.US) declined by 2.8%. The Bloomberg Asia Pacific Semiconductors Index fell by 2.7%, reducing its gains to around 22% so far this year.
Jun Bei Liu, portfolio manager at Tribeca Investment Partners Pty in Sydney, commented, "NVIDIA's performance is good, but the stock price fell due to overly high expectations for next year." She mentioned that the cooling off after a strong performance this year "provides a buying opportunity" as the long-term structural growth outlook remains unchanged.
These changes may exacerbate concerns about the overheating of AI, leading to recent selling and causing investors to shift to less popular areas in the stock market.
Furthermore, this could lead investors to further profit-taking in the rebound rally that has driven the Nasdaq 100 index up by 15% so far this year. Nevertheless, analysts generally hold an optimistic view on NVIDIA's prospects.
Kyle Rodda, market analyst at Capital.com, stated in an interview, "The tailwind is still very important." "We are now just talking about it as an ordinary stock, asking whether it is appropriate for this company to bear the risk at the current price."