All eyes had been on chip giant Nvidia, which reported on Wednesday night that quarterly profits more than doubled to US$43 billion as it projected more strong growth for the coming period.
While trading in Nvidia was initially volatile, investors ultimately turned on the stock, leaving it down 5.5 percent at the end of Thursday’s session.
“It says a lot when a stock market darling beating revenue forecasts by billions of dollars can no longer muster a positive share price reaction,” said Dan Coatsworth, head of markets at AJ Bell.
“The mood music is changing on Nvidia, and it represents a significant shift in investor sentiment,” he added.
The results come at a brittle moment for tech equities, which have suffered intermittent rounds of selling in recent days as markets weigh worries about whether massive capital spending on AI will prove profitable and the risk that incumbent technology companies could suffer.
Nvidia’s “results by themselves were good, but we have to keep in mind that hyperscalers are spending way more than they’re bringing in,” said Jack Ablin of Cresset Capital Management.
Investors are worried because slowing spending will “impact everyone along the chain,” Ablin said. “And Nvidia is obviously a big beneficiary of all that spending.”
The tech-heavy Nasdaq fell 1.2 percent, to 22,878, the S&P 500 fell 0.5 percent, to 6,908, while the Dow added just 0.03 percent, to 49,499. (AFP)
Edited by Cecil Wong
