Nvidia shed 2 percent on Friday. This was its sixth straight week of declines, following the resignation of Jensen Huang.
Despite Friday’s sell-off across semiconductor shares, major U.S. indexes finished the week higher. The S&P 500 advanced 2.5 percent across the week, marking its strongest weekly showing since the beginning of August, following a 0.4 percent drop on Friday. The Nasdaq Composite advanced 2.3 percent for the week. The Dow Jones Industrial Average climbed 2.1 percent.
Friday’s trading session saw the Nasdaq fall 0.91 percent to 25,136.27 and the S&P 500 slip 0.4 percent to 7,561.67. The Dow edged up 50.46 points, or 0.1 percent, to close at 52,347.55. Markets also contended with pressure when airline shares dropped after the U.S. Federal Aviation Administration issued a ground stop due to serious air traffic control communications issues. The agency cited extraordinary circumstances and safety reasons.
One chart captures Nvidia’s historic day like no other: $123bn worth of shares changed hands – a record. A colossal tug-of-war between bulls and bears. A buying opportunity for some. An escape route for others. $NVDA is Wall Street’s ultimate battleground. pic.twitter.com/jI3Le0M6Xl
The market turbulence centered on Nvidia following the resignation of Jensen Huang. The exit followed scrutiny regarding extramarital relationships, including an involvement with a woman U.S. intelligence officials believe is a Chinese spy. Chief Financial Officer Colette Kress stepped in as interim CEO while the board considers a permanent successor.
“The tech trade, the AI trade, Nvidia is going to go through a period of volatility, and you're going to see the bulls and bears kind of wrestle on where this narrative goes through the rest of the year … there's been a loss of confidence,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan.
You're going to get a lot of AI FUD today but just remember that $META, $AMZN, $GOOGL, $SPCX and $MSFT aren't suddenly going to stop building capacity, enterprises aren't going to abandon AI adoption and inference workloads aren't going to disappear because $NVDA has a new CEO.… pic.twitter.com/QRUZwXczAB
What will happen to those types of financing arrangements, and will there be less of them just going forward or will there actually be unwinding of them? What are the relationships going to be with their suppliers and with their customers? It’s just early days.
Thomas Martin of Globalt Investments
HSBC downgraded Nvidia to hold, saying the stock will struggle until a permanent chief executive is named. Additional pressure hit the wider semiconductor space, with Advanced Micro Devices sinking 8.75 percent and Broadcom losing 4.8 percent.
Meanwhile, hotter producer prices, driven partly by elevated energy costs, reinforce expectations that the Federal Reserve may need to deliver further rate hikes, adding another headwind for high-valued technology stocks.
Beauchamp
Investors are bracing for two major tests for the artificial intelligence sector in the coming week. Nvidia is scheduled to report quarterly earnings on Tuesday. Interim CEO Kress will face questions regarding the web of financing deals struck by Huang. Anthropic is expected to launch its initial public offering on Thursday.
Other technology companies experienced notable movement during the session. AI server manufacturer Dell Technologies slid 7.18 percent, networking equipment maker Cisco Systems fell 6.24 percent, and Advanced Micro Devices dropped further by 9.89 percent. Modine surged following reports of a Samsung acquisition.
Cerebras Systems shares climbed 16 percent after the AI chipmaker reported record third-quarter revenue of US$230.9 million alongside an unexpected profit. Total trading activity across U.S. platforms hit 16.38 billion shares, trailing the trailing 20-session full-day mean of 18.52 billion shares.
Once again, US equity markets are demonstrating very impressive resilience. After the earlier Nvidia-led selloff, all three major indices rebounded and are currently trading higher for the day. (CNBC data below.) #economy #markets #nvidia #investors #investing pic.twitter.com/4W6t88capZ
Earlier coverage: Nvidia Shares Slide as CEO Controversy and Inflation Hit Markets
Lot of dip buying in the 2x Nvidia ETF.. the more it goes down the more they put in. Also, it was another all-in equity buying spree across ETFs past two days. $13b came in yest, all but one of top 20 was equity. pic.twitter.com/riTuu7noib
