Tech Stocks Wrap Big Losing Week as AI Names Get Rocked After Nvidia Earnings
The tech sector faced its worst week in months as AI and semiconductor stocks plunged following Nvidia’s earnings report, raising doubts about overvaluation and slowing growth in the artificial intelligence boom. The Nasdaq Composite dropped nearly 3% this week, with high-momentum AI stocks like Super Micro Computer (SMCI), AMD, and even Nvidia posting steep losses. Investors are now debating whether the AI rally has peaked or if this is a temporary pullback.
Nvidia’s Stellar Earnings Spark Market Panic
Nvidia, the dominant force in AI chips, reported blockbuster earnings, crushing estimates with $26 billion in revenue—a 262% YoY surge. But instead of rallying, its stock tumbled 10% in two days, dragging down the entire AI sector. Analysts cite two major concerns:
- Sky-High Valuations: Nvidia’s 200% rally in the past year led some investors to lock in profits, fearing an overheated market.
- Growth Sustainability: While AI chip demand is strong, competition from AMD, Intel, and Big Tech’s custom silicon could squeeze Nvidia’s future margins.
AI Stocks in Freefall: SMCI, AMD, Meta Hit Hard
The selloff spread across the AI ecosystem:
– Super Micro Computer (SMCI): Crashed 20% this week after a parabolic rally.
– AMD: Dropped 8% as investors questioned its AI chip market share.
– Microsoft & Meta: Fell despite heavy AI spending, signaling sector-wide caution.
“The market is realizing AI winners will be few,” said Priya Sharma, FinQuest Capital analyst. “This is a reality check after months of hype.”
Bigger Risks: Rates, China, and Profit-Taking
The downturn reflects broader concerns:
1. Delayed Fed Rate Cuts: Strong U.S. economic data reduced hopes for near-term rate relief, pressuring growth stocks.
2. China Export Risks: Nvidia warned of revenue hits from U.S. restrictions on AI chip exports to China.
3. Institutional Profit-Taking: Hedge funds cashed out after the AI rally, worsening the decline.
AI Stocks: Correction or Collapse?
Experts are split on the sector’s future:
– Bulls: AI adoption is still early; demand for Nvidia’s GPUs remains strong.
– Bears: Valuations are extreme, and competition could shrink Nvidia’s dominance.
Indian Investors Brace for Impact
Indian retail and institutional investors, heavily exposed to U.S. tech via ETFs, are wary. “This correction highlights the risks of chasing momentum,” said Mumbai wealth manager Rajiv Mehta.
The Bottom Line
The AI rally has stalled, but the long-term potential remains. Nvidia’s earnings confirm real demand, but the market now wants sustainable growth—not just hype. Investors must decide: Is this a buying opportunity or the start of deeper volatility?
— Written by [Your Name], Senior Tech Analyst, NextMinuteNews
