The impact echoed throughout Asia. Key Nvidia suppliers experienced significant setbacks. In particular, South Korea's SK Hynix & Samsung Electronics were notably hit. SK Hynix, a major producer of high-bandwidth memory chips for Nvidia’s AI applications, saw its stock decline by 54%. Samsung Electronics, the largest stock on South Korea’s Kospi index, dropped over 3%. This drop underscores concerns about its supplier relationship with Nvidia, although details remain unclear.
Global chip stocks plummeted on Thursday after Nvidia announced its fiscal second-quarter results. Despite being impressive, the results did not meet traders' high expectations. Nvidia, a leading U.S. semiconductor company, reported a 122% year-over-year revenue increase. This is remarkable; however, it indicates a slowdown compared to the previous three quarters where growth rates exceeded 200%.
Other Nvidia suppliers, including Taiwan Semiconductor Manufacturing Company (TSMC) and Foxconn, also experienced declines, with TSMC falling by 2% and Foxconn by 1%. Japan’s Tokyo Electron, a semiconductor manufacturing firm, saw a 2% drop as well.
Not all chipmakers were in the red. In China, state-backed chipmaker SMIC gained nearly 1%, and Hua Hong Semiconductor rose almost 3%, buoyed by a broader rise in Hong Kong’s Hang Seng Index.
In the U.S., Nvidia’s rival AMD saw a slight dip of 0.5% in premarket trading, while other chip companies like SoftBank-backed Arm and Broadcom also moved lower. Super Micro, however, faced a sharp drop of over 4% after a shortseller’s report alleged accounting manipulation, leading to a delay in the firm’s annual report.
Meanwhile, in Europe, Dutch chip firms BE Semiconductor and ASML saw gains of 2%, with fellow Dutch companies ASMI and STMicroelectronics rising 3% and 2.5%, respectively. Germany’s Infineon also posted a nearly 2% increase.
The mixed reactions in the market highlight growing concerns that Nvidia’s explosive growth may be losing steam. While Nvidia continues to lead the AI chip market, some investors worry that the company might not sustain its breakneck growth pace in the upcoming quarter. Analysts like Luke Rahbari of Equity Armor Investments remain optimistic but acknowledge that Nvidia’s performance has set a high bar, leading to fears of a slowdown. Similarly, Ben Barringer of Quilter Cheviot noted that while demand for Nvidia’s high-performance computing chips remains strong, the company might be transitioning from extraordinary to simply strong growth.
Despite these concerns, Nvidia's dominant position in the industry remains unchallenged, and its slight dip could be seen as a natural correction after an exceptional rally this year. Investors will be closely watching Nvidia’s next moves as the company navigates these evolving market dynamics.
