- Semiconductor stocks plunged after reports of Chinese rival DeepSeek making AI chips
- Micron, AMD, Sandisk, Nvidia, and Intel shares fell sharply amid market selloff
- DeepSeek's chip targets AI inference, reducing reliance on Nvidia's technology
Semiconductor and storage manufacturers on the Wall Street have whiplashed into the red territory after a plethora of fears struck them all at once on Tuesday after a strong rally in the previous session.
Micron Technology Inc., Nvidia Corp., Advanced Micro Devices Inc., Sandisk Corp. and Intel Corp. plunged up to 15% after reports indicated that a major chinese rival DeepSeek is manufacturing its own AI chips.
Micron and AMD fell as low as 9% to $891.66 and $504.10, while Sadisk plummeted 14% to $1,485.02. Nvidia fell over 2% to trade at $191.14 and Intel plunged 11% to a low of $108.36.
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The chip is reportedly designed for the inference stage, which is used to process inputs and generate responses rather than training new models.
If reports are verified then it would mean that its reliance on Jensen Huang's bellwether Nvidia would be reduced, allowing it to expand its independent market in the AI world.
Besides that, investors grew more wary of whether the AI boom would be able to justify capex allocated to data centre buildouts and sky-high valuations after Samsung's solid earnings failed to excite them.
Despite Samsung estimating a 1800% profit jump going ahead, its shares settled 7% lower at 2,96,000 South Korean won. The company posted a 133.87 trillion won in first quarter revenue (about $90 billion) and operating profit hit 57.23 trillion won (about $38 billion), both records, up 69% and 756% from a year earlier.
The tech-heavy Nasdaq Composite index has taken a hit and fallen over 1.5% to 25,684.15 after these developments weighed big tech stocks.
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Separately, Elon Musk's SpaceX, which was included in the Nasdaq 100 index today, failed to enthuse traders and fell 4% to $154.32 within minutes of the opening bell.
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