US chip manufacturer Nvidia saw its shares plummet by nearly 10% on Tuesday, erasing £228bn from the company’s value in what is the largest single-day value drop in US stock market history.
The tech giant has witnessed its value skyrocket over the past year, more than doubling as it capitalised on the buzz surrounding artificial intelligence and the firm’s pivotal role in driving this technology. This year alone, its value has surged by 150%, trailing only Microsoft and Apple in surpassing the £2.28trillion valuation mark.
However, on Tuesday, the company’s value dipped by 9.5%, erasing £212bn from its market valuation after US manufacturing figures fell short of expectations. This left investors jittery about the overall health of the economy, with US job figures due on Friday and a decision on interest rates in the country expected next week.
UK and Asian markets also took a hit on Wednesday following the US slowdown, which also impacted other chip manufacturers and tech giants. Nvidia’s share price may have also been influenced by news that the US Department of Justice has issued a subpoena to the company, demanding it provide evidence regarding anti-trust issues.
Despite announcing a record quarterly revenue of $30bn just last week, Nvidia has hinted at a slowdown in its rapid growth. The tech giant’s projected growth for the next quarter is still on an upward trajectory, but at a slower pace than the previous year.
This has led some market observers to suggest that the hype around AI is beginning to cool down.