# Nvidias Financial Statement Sparks Stock Plunge in Semiconductor and AI Companies
The equity market experienced a downturn on Thursday, as semiconductor and other AI equities declined following a lackluster financial statement from chip industry leader Nvidia (NVDA) on Wednesday.
Nvidia’s share value decreased by more than 8% by the conclusion of Thursday’s trading, bringing its year-to-date decrease to over 10%. Other chip manufacturers such as Broadcom (AVGO) and Micron (MU) also experienced losses, each dropping by over 6%, while the Philadelphia Semiconductor Index (SOX) itself decreased by 6%.
Nvidia’s subpar performance had a cascading effect on major stock indices. The S&P 500 fell by 1.6%, with 7 of its 11 sectors decreasing, while the technology-focused Nasdaq Composite dropped by a considerable 2.8%.
While Nvidia’s Q4 financial statement, released Wednesday evening, did exceed Wall Street’s forecasts, with data center revenue (reflecting AI demand) nearly doubling year-over-year, the stock’s performance was unstable, fluctuating between gains and losses in after-hours trading last night and this morning.
Market participants had already anticipated significant stock price fluctuations following the financial statement, with options pricing forecasting an 8% shift up or down by the end of the week.
Thursday’s sell-off indicates that Nvidia’s outcomes were insufficient to please investors, as worries about exorbitant AI spending and the overall economic situation have diminished the momentum of the AI trade in recent weeks. Investors have been divesting high-priced AI stocks over the past week, and this trend intensified with Thursday’s sell-off.
Adding to the problems, AI server manufacturer Super Micro Computer (SMCI), which barely avoided being removed from the Nasdaq, saw its share price plummet by 16%. Nuclear power supplier Vistra (VST), despite a better-than-expected earnings report, fell by 12% as the broader AI downturn overshadowed its impressive gains from last year. Palantir (PLTR), another Wall Street favorite in the AI space, also declined by 5%.
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