Major American chipmakers are looking at another session of decline on Friday as futures tied to Micron Inc., Advanced Micro Devices Inc., and Nvidia corp slid up to 4%. The extended fall dragged down the tech-heavy Nasdaq composite index, which traded over 2% lower.
The rout comes amid a highly volatile market momentum for chipstocks. On Thursday, semiconductor companies and memory makers were dumped heavily by investors despite TSMC posting blockbuster earnings.
As of 9:45 a.m. EST, AMD traded 7.3% lower at $464.63, Micron was down 3.84% to $820.11, Nvidia slumped 4% to $199.37, and Sandisk traded over 4% lower at $1,349.17.
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TSMC, the world's largest producer of AI chips, reported a 77% surge in its second quarter net profit to T$706.6 billion versus forecast of T$632.6 billion.
AI Capex forecast, usually a key dictator of market movement and investor sentiment along with being a symbol for the management's confidence, $60 billion and $64 billion, exceeding the previous guidance of the high end of between $52 billion and $56 billion.
"The deeper issue is that AI has moved from a simple earnings-upgrade story to a crowded cycle trade. The demand pool remains real because hyperscalers are still spending on compute, memory, networking, power, and data-centre infrastructure. But the equity market had started pricing that demand with very little margin for error," stated Harshal Dasani, Business Head, INVAsset PMS
He highlighted that in such a setup, even a small shift in rates, capex commentary, export controls, or supply assumptions can create outsized moves.
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