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Nvidia (NVDA) stock rout leaves global chip shares volatile
The logo of Nvidia Corporation is seen during the annual Computex computer exhibition in Taipei, Taiwan, May 30, 2017.
Tyrone Siu | Reuters
Global semiconductor stocks saw volatile trading on Tuesday after a slump in shares of Nvidia during the previous session.
Shares of chip firms in Europe and Asia were broadly in the red as investors reacted to Nvidia losing over $500 billion in market capitalization over three trading days — although the U.S. chipmaking giant’s shares were around 3% higher in early trade Tuesday.
In Europe, ASML, the Dutch chip equipment giant, was down about 0.5% as of 10:45 a.m. ET Tuesday, off earlier lows. ASML is a key player in the global semiconductor market. The firm makes and sells extreme ultraviolet lithography (EUV) machines, which chipmakers use to manufacture integrated circuits.
Meanwhile, Switzerland-based semiconductor firm StMicroelectronics‘ shares were down 1.7%.
ASMI, meanwhile, was up 0.4% while Soitec rose 0.4%, reversing losses earlier in the day as Nvidia shares recovered. The pan-European Stoxx 600 was 0.3% lower.
Asian semiconductor shares also had a volatile day. Taiwanese chip firm MediaTek’s shares fell 1.8%, while South Korean firm Samsung slipped 0.3%.
TSMC, the world’s largest chipmaker, and SK Hynix managed to dodge the negative sentiment, rising 0.5% and 0.9%, respectively.
Nvidia shares rebound
It comes after a sharp slide in shares of Nvidia over three consecutive sessions, falling 13% from Thursday’s all-time highs.
On Monday, Nvidia closed down 6.7% — its second-steepest drop of the year — but shares started to rebound in early trade Tuesday.
The company last week topped Apple and Microsoft as the most valuable U.S. company, reaching a market capitalization over $3.4 trillion. By the end of Monday, Nvidia had seen more than $540 billion erased from its market value.
For its part, Nvidia says that demand for its prized AI graphics processing units (GPUs) remains high.
Companies including Microsoft, Google, Amazon, Oracle, and Meta are buying billions of dollars worth of its chips to power their data centers and cloud services.
Later this year, Nvidia will start shipping its next-generation AI chips, called Blackwell, which some analysts say could kick off another cycle of significant growth for the chipmaker and its partners.
- CNBC’s Kif Leswing contributed to this report