The 'Bubbleland' that investor group Elliot had termed, looking at the rise of AI and chip firms in recent past, appears to be crumbling as the shares of Nvidia, one of the biggest beneficiaries of the recent boom, had a terrible day at the Wall Street on Tuesday, September 4.
Nvidia Shares Drop By 9%
The Jensen Huang-led maker of the advanced Blackwell chips closed for the day's proceedings with significant losses, taking the Nasdaq composite with it.
The company shares ended with a gargantuan decline of 9.53 per cent or USD 11.37. This took the overall value of the shares to below USD 120, to USD 108.00 per share. In addition, it also needs to be noted that just over the past 5 trading sessions alone, the chip company's shares dropped by 13.65 per cent.
In addition, the Nasdaq Composite also closed in red at 17,136.30, with a decline of 3.26 per cent or 577.33 points.
Nvidia shares have been on the decline, despite posting record numbers at its second-quarter earnings, when the company posted record revenue and a rise in net income.
This is largely attributed to the ongoing concerns over the US economic slowdown in an election year. Concerns over the potential fuel prices is another factor. Nevertheless, it needs to be noted that the crude oil prices (Brent Crude and WTI) have only decreased in value in the recent past.
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The Bubbleland In Decline
Aside from the aforementioned reasons, arguably the biggest factor, as mentioned before, is the perceived slowdown in the prospects of the AI boom, which had taken the globe by storm with the advent of advanced chatbots.
This fear of the AI boom not being the revolution that it was touted to be has been supplemented by the decline in the performance of most tech-orientated companies in the recent past. | Representative Image
This fear of the AI boom not being the revolution that it was touted to be has been supplemented by the decline in the performance of most tech-orientated companies in the recent past.
It cannot be missed that it is not just Nvidia that appears to have suffered in the depleting investor interest in artificial intelligence. Two of its biggest rivals, AMD and Intel, also suffered in yesterday's trading session.
AMD lost 7.82 per cent or USD 11.62, taking the overall value of shares to USD 136.94. The aforementioned Intel also closed in red at USD 20.10, with a decline of 8.80 per cent or USD 1.94.
