Semiconductor stocks volatile after Nvidia’s $500 billion wipeout

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Global semiconductor stocks experienced volatile trading on Tuesday following a significant decline in Nvidia shares in the previous session.

The fluctuations reflect investor reactions to Nvidia’s sharp drop in market capitalisation, impacting chip firms across Europe and Asia.

Nvidia’s market value tumbles, then rebounds

Shares of Nvidia fell sharply over three consecutive sessions, losing 13% from Thursday’s all-time highs. By the end of Monday, Nvidia’s market value had dropped by more than $540 billion. Shares began to rebound on Tuesday, rising around 5.5% by mid-morning.

The rebound helped stabilise some of the associated losses in the semiconductor sector.

European and Asian semiconductor stocks react

In Europe, the impact of Nvidia’s slump was felt across various semiconductor companies. Switzerland-based STMicroelectronics saw its shares end the day down by over 1.4%.

Dutch chip equipment giant ASML reversed early losses to close up 0.18%, reflecting Nvidia’s recovery.

Other European semiconductor firms, including Soitec and ASMI, experienced mixed results, with Soitec slipping 0.1% and ASMI climbing 0.6% after an earlier decline. The pan-European Stoxx 600 index closed around 0.3% lower.

Asian semiconductor shares also had a tumultuous trading day. Taiwanese chip firm MediaTek’s shares fell by 1.8%, and South Korean firm Samsung slipped 0.3%.

However, some companies managed to avoid the negative trend. TSMC, the world’s largest chipmaker, rose by 0.5%, and SK Hynix increased by 0.9%, showing resilience amid the broader market volatility.

Demand for Nvidia chips remains high

Despite the recent stock market turbulence, Nvidia’s demand for its AI graphics processing units (GPUs) remains strong.

Major technology companies, including Microsoft, Google, Amazon, Oracle, and Meta, are purchasing billions of dollars worth of Nvidia chips to power their data centres and cloud services.

Later this year, Nvidia is set to launch its next-generation AI chips, known as Blackwell. Analysts suggest that these new chips could initiate another cycle of significant growth for Nvidia and its partners, potentially boosting the company’s market position further.

The recent volatility in global semiconductor stocks highlights the market’s sensitivity to significant movements in major players like Nvidia.

While Nvidia’s shares have shown signs of recovery, the broader impact on the semiconductor sector underscores the interconnected nature of global technology markets.

As Nvidia prepares to release its next-generation AI chips, investors will be closely monitoring the company’s performance and its influence on the semiconductor industry.

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