Nvidia Leads Chipmaker Selloff Amid Market Struggles
Nvidia, a central player in the AI industry, reported significant growth in Q2 with profits of $16.6 billion, an increase of over $10 billion from the same period last year. This substantial profit surge has made the company's stock highly volatile, attracting considerable interest from traders. The stock's volatility is driven by at least 10 ETFs that trade Nvidia options intraday, and the after-hours trading session saw over 44 million shares worth more than $5 billion traded in a single hour. Before the market reopened on Thursday, the total off-hours trading volume reached 110 million shares, valued at about $13 billion.
Despite Nvidia's strong financial performance, the stock experienced a 7.6% drop on Tuesday, marking its largest percentage decrease since April 2024. The decline is partly attributed to rumors of a delay in the release of its Blackwell product, although Nvidia's management has confirmed that the product is on track to ship by Q4. Nvidia's Q2 revenue of $30.04 billion, a 122% year-over-year increase, surpassed consensus estimates but showed a deceleration compared to the previous quarter's growth. The company's data center revenue also saw significant growth, reaching an annualized run rate of $105 billion, up from $90 billion last year.
In the broader semiconductor market, other chipmakers like Advanced Micro Devices (AMD), Qualcomm, and Broadcom also experienced declines in their share prices. This sector-wide weakness is influenced by various factors, including geopolitical tensions and the anticipation of the Federal Reserve's rate decision. Additionally, the risk-off sentiment ahead of the monthly jobs report has added to the market's cautious stance. Reports indicate that China has warned of retaliation if Japan restricts exports of chipmaking equipment, adding to the sector's uncertainties.
