Nvidia, chip stocks drop into correction as rate bets shift
A gauge of global chip stocks and AI bellwether Nvidia Corp have fallen together into a technical correction, showing moderation in the global equity market’s most conspicuous driver over the past year and a half.
The Philadelphia Semiconductor Index and Nvidia dropped more than 3 per cent each Wednesday, pushing them down more than 10 per cent from record high levels reached in March.
In addition to concerns of the rallies becoming overheated, the sector has been hit by concerns over pushed back Federal Reserve interest rate cuts and China’s weak economy. Dutch chipmaking equipment firm ASML Holding NV led Wednesday’s decline in the so-called SOX gauge after it posted disappointing orders for the latest quarter. Top customers are holding off as they work through stockpiles, though China’s buying of less-sophisticated machines has held up amid US restrictions on its access to high-tech equipment. Earnings due later Thursday from Taiwan Semiconductor Manufacturing Co, the world’s largest foundry, will shed further light on the outlook for demand.
Expectations have been raised since the company reported better-thanexpected sales for the latest quarter.
TSMC outlook beats estimates on AI demand
Taiwan Semiconductor Manufacturing Co. delivered a better-than-projected revenue outlook and stuck with plans to spend as much as $32 billion in 2024, shoring up expectations of sustained growth in AI demand. The forecast followed its first quarterly profit rise in a year, after strong AI demand revived growth at Asia’s biggest company.