On the 6th (local time), NVIDIA, a leading AI chip company, saw its stock price drop by over 5%. In the New York stock market, NVIDIA’s stock closed at $110.57, down 5.74% from the previous day, marking its lowest level since September 10 last year. The price briefly held the $110 level but continued to decline, expanding its losses throughout the day. This decrease reduced its market capitalization to $2.697 trillion, moving it further from the $3 trillion mark.
The drop is attributed to delays in meeting demand for its latest chip, Blackwell, due to supply shortages. NVIDIA’s CFO, Colette Kress, mentioned in an interview with Morgan Stanley that it would take some time to fulfill all the demand for the new Blackwell chip due to supply issues. Despite increasing supply efforts, NVIDIA still falls short of meeting the rising demand. Kress also stated that the company is likely to sell both the Blackwell and older Hopper chips simultaneously for the time being.
The market had anticipated significant revenue growth from NVIDIA due to the expansion of Blackwell supply, but the delays led to investor disappointment and sell-offs. NVIDIA’s CFO also addressed the issue of some companies opting to build their own chips, asserting that almost all customers still use NVIDIA’s products despite considering their own designs.
Further complicating NVIDIA’s situation is the U.S. government’s restriction on exporting the latest AI chips to certain countries, with the licensing timeline remaining unclear. The export approval process is described as complex due to varying regulations and policies across countries.
Meanwhile, Marvell Technology, another semiconductor company, experienced a 19.8% drop in its stock price following its earnings report, influencing the broader market. Marvell reported a 27% year-over-year revenue increase to $1.82 billion and earnings of $0.60 per share, slightly exceeding Wall Street expectations. However, projections for the current quarter did not meet all analysts’ high expectations, contributing to a significant decline in stock value, the largest since September 27, 2001.
Analyst Tore Svanberg from Stifel Financial commented that investors have been cautious about AI-related stocks recently, and Marvell’s announcement did not alleviate these concerns. As a result, semiconductor stocks collectively fell, with Taiwan’s TSMC down 4.57%, Broadcom declining 6.33%, and AMD and Qualcomm closing down 2.77% and 1.02%, respectively. Consequently, the Philadelphia Semiconductor Index dropped by 4.53%.