Even amid the abundance of positive signals in Nvidia’s quarterly report, investors found reasons for pessimism. They were alarmed not only by the slowdown in revenue growth, but also by the weak forecast for the current quarter. As a result, the company’s shares, as already noted, sank by almost 7% during additional trading on Wednesday. On Thursday morning, stock quotes of Asian issuers, which are related to Nvidia by nature of their activities, began to fall.
Image source: NVIDIA
According to CNBC, the shares of Samsung Electronics and SK hynix received the most negativity in this regard. The latter fell by 5.4%, the decline of the former exceeded 3%. As you know, the main supplier of HBM3E memory chips for Nvidia’s needs is now SK hynix. If sales volumes of Nvidia accelerators for one reason or another stop increasing at the same rate, then SK hynix’s revenue will predictably suffer. Samsung is less affected by this news, since it has yet to certify its HBM3E chips to Nvidia’s requirements. However, according to some sources, this issue has already been largely resolved.
Taiwanese Foxconn supplies server systems based on Nvidia accelerators, so its business also depends on the success of the latter. Shares of this contract manufacturer of server equipment fell in price by 1% after the publication of quarterly reports. The contractor for the production of chips for Nvidia accelerators is Taiwan’s TSMC, which also packages them, so investor dissatisfaction extended to these securities, which fell in price by 2%.
Even Japanese suppliers of chip production equipment did not stand aside. Tokyo Electron saw its share price decline by 2%, while the Netherlands’ ASML saw its stock price rise by 1%. Notably, Chinese contract chip makers saw their prices rise, up 1% for SMIC and 3% for Hua Hong Semiconductor.
Investor pessimism regarding Nvidia shares also affected the securities of competitors. AMD stock prices fell by almost 4% during the additional trading session on Wednesday. The developer of processor architectures Arm, as well as its clients Qualcomm and Broadcom, also joined the ranks of issuers with a negative trend in stock price changes. Server equipment manufacturer Super Micro not only lost 19% of its capitalization the day before, but after trading closed on Wednesday it added another 7% drop. However, in this case, the dynamics of the stock price were more influenced by problems with the financial statements of a particular company.