Nvidia's Record Decline: A Signal of AI Investor Caution
Nvidia's shares plunged 9.5%, erasing $279 billion in market value amid investor concerns over AI technology. This dip mirrored a broader market downturn and followed a forecast that failed expectations. Other major tech stocks like Intel and Microsoft also saw declines due to AI investment worries.
In a historic downturn, Nvidia's shares plummeted 9.5% on Tuesday, wiping out $279 billion in market capitalization. This significant drop came as investors recalibrated their optimism about artificial intelligence, prompted by lukewarm economic data.
The PHLX chip index suffered its steepest one-day decline since 2020, plummeting 7.75%. Nvidia had issued a quarterly forecast last Wednesday that fell short of investor expectations, driving a sharp correction in its stock. The tech sector, heavily invested in AI, faced broad sell-offs, with Intel and Broadcom seeing significant losses.
Investor confidence has waned as recent research questions whether the revenue from AI justifies the heavy capital expenditure. Nvidia's stock, despite its recent fall, remains 118% up for the year. However, the overall market sentiment remains cautious with the Federal Reserve's upcoming policy announcement adding to the uncertainty.
(With inputs from agencies.)
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