Topline
Fresh off of a record closing high, Nvidia stock slid Tuesday as part of a semiconductor chip stock slump with an unusual impetus: A less-than-stellar earnings release from a Dutch company which accidentally came out earlier than expected.
Nvidia stock struggled Tuesday.
Key Facts
Nvidia shares fell 4.5% in Tuesday trading, wiping out some $155 billion in market capitalization for the California firm, more than AT&T’s $154 billion total market value.
Nvidia stock had its steepest daily loss since Sept. 3’s 10% dip, which marked the largest erosion of one company’s market cap in a single day in history at $279 billion.
Shares of several other firms involved in designing and manufacturing the semiconductor technology powering the generative AI explosion also tumbled, with Advanced Micro Devices, Arm Holdings and Broadcom stocks sliding at least 3.5%.
Surprising Fact
The stateside chip stock dip came after Dutch firm ASML, which makes much of the equipment used to make the high-tech AI chips and works closely with Nvidia, reported earnings a day earlier than expected due to what the company attributed to a “technical error.” The unanticipated release included a warning of “more gradual” growth for ASML, which said it expects 2025 revenues to come in between $32.7 billion to $38.1 billion, well below consensus analyst forecasts of $39.1. New York-listed American depository receipts of ASML stock lost 17.5% during Tuesday trading, the worst loss since March 2020 and the second-worst day of the last decade for the stock.
Key Background
With a $3.2 trillion market cap, Nvidia remains the second-largest company in the world, trailing only the $3.5 trillion iPhone maker Apple, which hit its highest ever share price Tuesday morning. After finishing 2023 as the S&P 500 index’s best-performing stock with a blistering 239% gain, Nvidia is again the biggest winner so far in 2024, gaining 167%. The surge comes as Nvidia reports exponential earnings growth thanks to “insane” demand for its graphics processing units, the semiconductor technology which powers generative AI applications at companies like Meta and Tesla. Jensen Huang, Nvidia’s CEO since he cofounded the company in 1993, is the world’s 11th-richest person thanks to his 3.5% stake in Nvidia, according to Forbes’ estimates. Huang’s net worth fell $5 billion due to Tuesday’s dip.