Chip maker’s shares plunge in record single-day value loss for a US firm
Nearly 300 billion dollars was wiped off its market value
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Your support makes all the difference.Shares in US chip maker Nvidia plunged nearly 10% on Tuesday, wiping nearly 300 billion dollars (£228 billion) off the firm’s value in the largest single-day value drop in US stock market history.
The technology giant has seen its value soar over the last year, more than doubling in that time, as it rode the wave of excitement around artificial intelligence and the firm’s central role in powering that technology.
It has seen its value rise by 150% this year alone, following only Microsoft and Apple in breaching the three trillion dollar (£2.28 trillion) valuation mark.
But on Tuesday, the firm’s value fell by 9.5%, wiping 279 billion dollars (£212 billion) off its market valuation after US manufacturing figures fell below expectations, leaving investors nervous about the overall state of the economy, with US job figures coming on Friday and a decision on interest rates in the country due next week.
US stocks tumbled on Tuesday to their worst day since an early August sell-off, as a week full of updates on the economy got off to a discouragingly weak start.
The S&P 500 sank 2.1% to give back a chunk of the gains from a three-week winning streak that had carried it to the cusp of its all-time high.
The Dow Jones Industrial Average dropped 626 points, or 1.5%, from its own record set on Friday before Monday’s Labour Day holiday.
Treasury yields also stumbled in the bond market after a report showed US manufacturing shrank again in August, sputtering under the weight of high interest rates.
Manufacturing has been contracting for most of the past two years, and its performance for August was worse than economists expected.
“Demand remains subdued, as companies show an unwillingness to invest in capital and inventory due to current federal monetary policy and election uncertainty,” said Timothy Fiore, chairman of the Institute for Supply Management’s manufacturing business survey committee.
UK and Asian markets also dipped on Wednesday after the US slowdown, which also hit other chip makers and tech giants.
Nvidia’s share price may also have been affected by news that the US department of justice has issued a subpoena to the firm, requiring it to give evidence over anti-trust issues.
Despite reporting record quarterly revenue of 30 billion dollars just last week, Nvidia had hinted that its rapid growth was beginning to slow, with the firm’s forecast growth for the next three months still going up, but at a slower pace than over the last year, leading some market watchers to suggest the hype around AI was beginning to calm.