Semiconductor stocks stumbled on Monday as investors braced for Nvidia’s highly anticipated earnings report, set to drop after markets close on Wednesday.
The AI powerhouse, Nvidia, saw its shares dip 2.3%, giving up gains from Friday when optimism about its financial results had surged.
This pullback sent ripples through the sector, with the PHLX Semiconductor Sector Index (SOX) sliding 2.5%.
Nvidia has been the shining star of the stock market in 2024, its AI-driven growth story driving monumental gains. In June, it briefly overtook Microsoft as the world’s most valuable company by market cap.
Given Nvidia’s outsized role, its earnings report could significantly influence the broader market, making waves beyond the semiconductor space.
Analysts are bullish on Nvidia’s prospects, forecasting that its second-quarter revenue and earnings will more than double compared to last year.
However, these high expectations, which have risen recently, set a high bar for the company to meet—let alone surpass.
Other chip stocks weren’t spared in Monday’s sell-off. Micron Technology, a key Nvidia partner, dropped nearly 4% after Needham cut its price target to $140 from $150, citing a flat outlook for its DRAM and NAND shipments.
Lam Research and Advanced Micro Devices (AMD) also took hits, falling 3.4% and 3.2%, respectively.
As the business world waits with bated breath for Nvidia’s numbers, the stakes are high, and the fallout could be wide-reaching.
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