AI suppliers take a hit on the stock market after Nvidia plunge

"The global chip sector took a heavy blow on Friday after Nvidia shares unexpectedly ended in the red in the United States. This happened despite better-than-expected quarterly figures and an optimistic outlook from the company. Sentiment changed abruptly, which immediately affected companies closely linked to Nvidia. The sell-off came after investors were shocked by broader risks in the financial markets, according to market analysts."

"CNBC cites a combination of factors for the turmoil, namely a correction in crypto markets, uncertainty about the timeline for interest rate cuts in the United States, and a more cautious attitude among investors toward technology stocks. Analysts indicate that the growing discussion about a possible overheating of the AI market is putting additional pressure on the market. As a result, parties that benefit most from the AI boom, such as Nvidia and its direct suppliers, are more quickly affected when sentiment turns."

"SoftBank was subsequently among the biggest losers. Its shares lost more than 10% in Tokyo. Although the group has previously reduced its direct interests in Nvidia, it remains closely linked to the chip architecture used by Nvidia through chip designer Arm. In addition, SoftBank is investing heavily in AI projects that focus on Nvidia technology, including the huge Stargate program for data centers in the United States."

Global semiconductor stocks plunged after Nvidia shares unexpectedly closed lower in the United States despite strong quarterly results and a bullish outlook. Investors reacted to sudden shifts in risk appetite across financial markets, triggering sell-offs among firms closely tied to Nvidia. Market catalysts included a crypto market correction, uncertainty over the timing of US interest rate cuts, and increased investor caution toward technology stocks. Growing debate about potential AI market overheating intensified pressure on companies benefiting most from AI demand. Major losses hit SoftBank, SK Hynix, Samsung, TSMC, and Foxconn, with selling spreading to smaller Japanese semiconductor firms.

Read at Techzine Global