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Nvidia, renowned for its AI chip designs, is poised to disclose its financial performance after the U.S. market closes on Wednesday, with investors keenly awaiting insights from CEO Jensen Huang regarding the sustainability of the company’s impressive growth trajectory.
On Wednesday morning, shares of TSMC, the world’s leading producer of advanced processors utilized by major players like Nvidia and Apple, dipped more than 1%. Similarly, Nasdaq-listed ASML, a Dutch semiconductor equipment manufacturer pivotal in chip fabrication processes, saw a 2.09% decrease in its shares on Tuesday. ASML provides crucial machinery, including extreme ultraviolet lithography equipment, essential for crafting cutting-edge chips like those found in Apple iPhones.
Accompanying this trend, other Taiwanese semiconductor firms such as United Microelectronics Corp. and MediaTek also experienced marginal declines of 0.91% and 0.31%, respectively.
Nvidia’s shares, which have witnessed a remarkable surge of over 200% in the past year, reflect the burgeoning demand for its graphics processing units, particularly amidst the AI boom. Notably, Nvidia’s GPUs power applications like ChatGPT, a viral generative AI chatbot recognized for its human-like conversational abilities.
Despite this, Nvidia encountered a 4.35% decline in its shares on Tuesday, contributing to a broader downturn in U.S. tech stocks. The SoftBank-owned U.K. chip designer rival, Arm Holdings, also witnessed a 5.12% decrease.
In light of Nvidia’s impending earnings report, Morgan Stanley offered insights, stating that the company is expected to deliver a robust quarter in alignment with recent upward revisions to expectations. While acknowledging Nvidia’s stock surge of over 50% year-to-date, the report emphasized a constructive sentiment among investors tempered by concerns about potentially inflated near-term expectations. As such, analysts anticipate a subdued immediate market reaction to positive results, emphasizing a cautious yet optimistic outlook for Nvidia’s performance moving forward.