DBT Bureau
Bengaluru, 4 September 2024
The share price of chip giant, Nvidia plunged more than 9% on Tuesday on Nasdaq, triggering fears of money moving out of technology stocks.
The market cap of Nvidia plunged by about $279 billion, making it the biggest one-day wipeout for any company on American bourses on Tuesday.
Now, the investors are eagerly waiting to gauge the trend in technology stocks, which have been witnessing sell-offs in bouts in recent days.
Analysts are of the opinion that investors are increasingly worries about the slow return on investment in AI-related projects by tech companies.
The fall is not limited to Nvidia alone as a host of other tech companies are slowly facing selling pressure. Stocks of Intel, Amazon, Alphabet, and other tech majors have seen correction in recent weeks after the second quarter results of many technology giants failed to enthuse investors. Especially, the heavy bets on AI through aggressive investment seem to be not yielding immediate revenue dividends.
Meanwhile, investors are keenly waiting for the US Federal Reserve’s decision on interest rate on September 18. Most industry watchers expect the US Fed to cut interest rates, which is likely to support technology firms through higher spending on technology.
Nvidia Q2 earning:
In the second quarter ended June, Nvidia’s revenue was $30.04 billion, which was more than doubled as compared to the same period of last year.
Revenue in Nvidia’s data center business, which includes its AI processors, climbed 154% from a year earlier to $26.3 billion, accounting for 88% of total sales. This showed, the company reaped the dividends coming from AI-related spending.
Net income more than doubled to $16.6 billion, or 67 cents per share, in the quarter, from $6.18 billion, or 25 cents per share, in the year-ago period.
