Semiconductors Facing Headwinds: Nvidia and Others Under Pressure

Nvidia's shares experienced a significant decline of nearly 5% as investors are concerned about a potential slowdown in artificial intelligence spending and possible delivery delays for their AI chips. These uncertainties are also reflected in the overall performance of the semiconductor industry: The PHLX Semiconductor Index recorded a decline of over 4%, which was more pronounced than the drop in the broader market. Other semiconductor giants such as Advanced Micro Devices and Intel also suffered losses. While AMD fell by 2.7%, Intel and Qualcomm recorded declines of about 3%. Broadcom was also heavily affected, with a decrease of 4.5%. Arm was hit particularly hard, plunging almost 9%. Microsoft plays a significant role in this development, as it highlighted delays in the delivery of graphics processors—AI chips—via third parties in its latest quarterly report, which impacted the growth of its AI business in the cloud sector. These GPUs are largely supplied by Nvidia. Analyst Gil Luria from D.A. Davidson suggested that this could indicate that Nvidia is currently unable to meet demand adequately. Additionally, there are concerns about a potential slowdown in investment enthusiasm from major AI customers like Microsoft. CFO Amy Hood mentioned that the growth rate of AI-driven spending might flatten out at some point, although she did not specify a timeline. Alphabet, the parent company of Google, also warned in its report about consistent investments in the fourth quarter. CFO Anat Ashkenazi emphasized that the company is striving to balance AI investments with cost discipline. It is forecasted that spending will increase in 2025, although not on the same scale as before. The results from Advanced Micro Devices also contributed to the uncertainty. A lower-than-expected revenue outlook led to AMD's biggest one-day loss in two years.