Nvidia’s Half-Trillion-Dollar Loss Sends Global Chip Stocks Volatile

Nvidia’s Half-Trillion-Dollar Loss Sends Global Chip Stocks Volatile

The annual computing trade show Computex, held in Taipei, Taiwan on May 30, 2017, featured the logo of Nvidia Corporation.

Global semiconductor stocks were volatile on Tuesday, following a significant decline in Nvidia shares in the previous session.

Early trading saw chipmakers in Europe and Asia face a decline in their shares, as investors reacted to Nvidia losing more than $500 billion in market capitalization in three trading days. However, some stocks managed to recover, with shares of the U.S. chipmaking giant up about 5.5% as of 11:40 a.m. ET on Tuesday.

Shares of Swiss semiconductor company STMicroelectronics closed the day down more than 1.4%.

In Europe, Dutch chipmaking giant ASML initially took a hit but reversed that trend to close 0.18% higher as Nvidia shares recovered. ASML plays a crucial role in the global semiconductor market, producing and selling extreme ultraviolet (EUV) lithography machines that chipmakers use to make integrated circuits.

Soitec, on the other hand, slipped 0.1%, while ASMI rose 0.6% after falling earlier in the session. The pan-European Stoxx600 closed down about 0.3%.

Asian semiconductor stocks also had a volatile day. Taiwanese chip maker MediaTek saw its shares fall 1.8%, while South Korean company Samsung fell 0.3%.

Meanwhile, TSMC, the world’s largest chipmaker, and SK Hynix managed to avoid negative sentiment, gaining 0.5% and 0.9%, respectively.

Nvidia stock rebounds

This comes after Nvidia shares have fallen sharply for three consecutive sessions, falling 13% from their all-time highs reached on Thursday.

On Monday, Nvidia fell 6.7%, marking its second-largest decline of the year. However, shares began to recover in early trading Tuesday.

Last week, Nvidia surpassed Apple and Microsoft to become the most valuable U.S. company, with a market cap of more than $3.4 trillion. By the end of Monday, Nvidia had lost more than $540 billion in market value after hitting an all-time high in intraday trading on Thursday.

Nvidia said demand for its popular artificial intelligence graphics processing units (GPUs) remains high. Companies including Microsoft, Google, Amazon, Oracle and Half are investing billions of dollars in Nvidia chips to power their data centers and cloud services.

By the end of the year, Nvidia plans to begin shipping its next-generation AI chips, known as Blackwell, which analysts say could kick off another phase of significant growth for the chipmaker and its partners.