to US technology stocks Failed to sustain initial gains this Thursday (20), as rally driven Nvidia Momentum has been lost and concerns about high valuations in the technology sector are back in the spotlight.
Nvidia shares fell 2.2% after rising 5% earlier as its exceptional results eased some concerns about the possibility of this happening. artificial intelligence bubble, Although doubts still remain about the return of the huge investment boom.
Global bullish sentiment lost momentum among US stocks around midday as chipmakers took a hit Advanced Micro Devices (AMD) and micron technology Decreased by 5.8% and 8.3%, respectively. the Philadelphia SE Semiconductor Index Decreased by 2.8%.
“The fact that companies selling semiconductors to power AI are doing well does not remove the concern that some of these giant companies are spending too much money on AI infrastructure,” said Robert Pavlik, senior portfolio manager at International Interest. Dakota Wealth. “You have one company taking advantage of this, but other companies are still overspending.”
Actions Microsoft It also decreased by 1.3% alphabet Operates near stability. The European Technology Index also lost strength and closed up by only 0.1% Dutch ASML It closed with gains of 0.4% after rising to 3.2%. Share Receipts (ADRs). TSMC, from Taiwan, Decreased by 0.6%.
Earlier, in Asia, SK Hynix It closed up about 2%, and Japanese Nikkei indexreturned to the 50,000-point level, driven by chip suppliers and AI-related actions.
Nvidia CEO Jensen Huang: Demand is “incredible.”
Investors have yet to react positively Nvidia CEO Jensen HuangHe dismissed concerns about a bubble, calling the order “unbelievable” and saying the orders extend through 2026. “We’re seeing something very different than a fleeting hype cycle,” he said, pointing to Nvidia’s close integration into cloud, enterprise and edge computing.
Analysts in JP Morgan He stated, “Amid the wave of pre-results concerns, Nvidia not only delivered strong numbers and robust guidance, but performed beyond expectations, exceeding even the most optimistic forecasts. In our view, this is evidence of strong execution across Nvidia’s broad and complex supply chain.”
While some celebrated the positive results as evidence that the AI boom is still going strong, others pointed to external risks associated with capital expenditures and financing from the company’s customers, as well as challenges in expanding data centers due to power constraints and memory chip shortages.
Nvidia also relies heavily on a limited number of customers, and the increasingly circular nature of some deals has raised concerns, especially as AI startups struggle to generate enough profits to justify billions of dollars in investments.
However, the company’s role as a symbol of the artificial intelligence revolution has made it the only one in the world with a market value exceeding $5 trillion, after its shares rose more than 1,190% in the past three years.
Despite the volatility, Nvidia posted a nearly 8% decline in November. However, this year, it is still up more than 36%. The expected 12-month P/E is 28.44, lower than AMD’s 35.70 and well below Intel’s 62.38.
These results represent the company’s first acceleration in seven quarters, driven by sales growth in the data center sector. Revenue forecasts beat estimates, and margins are expected to remain around 70% through fiscal 2027.
“Demand continues to outstrip supply, with major technology companies and server makers buying aggressively,” said Bob O’Donnell, a senior analyst at Bank. Technical analysis research.
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