Asian tech heavyweights, particularly those linked to artificial intelligence, fell on Tuesday, following a decline in Nvidia in after-hours trading after the company announced a new line of AI chips.
NVIDIA Corp. (NASDAQ:NVDA) unveiled its newest and most powerful AI chip, dubbed Blackwell, at its annual developer conference on Monday. But the AI giant’s stock received little support from the launch, falling nearly 2% in after-market trading.
Asian tech and AI stocks fall
Nvidia's decline spread to Asian markets, with South Korean memory chipmaker SK Hynix Inc (KS:000660), which has become increasingly exposed to the AI industry, losing more than 5%.
Peer Samsung Electronics Co Ltd (KS:005930) lost 1.1%.
Asian chip giant TSMC (TW:2330)(NYSE:TSM) fell 0.3% in Taiwan trading. In Japan, Nvidia supplier Advantest Corp. (TYO:6857) fell 2.3%, while SoftBank Group Corp. (TYO:9984), which has exposure to AI through its chip design unit Arm Holdings (NASDAQ:ARM), fell 0.8%.
While it's unclear why shares of Nvidia and its peers fell, analysts said Blackwell's debut largely went as expected.
Nvidia CEO Jensen Huang also gave scant hints about pricing for the new chips, which is expected to be a key factor in the market's revenue outlook through 2024.
Weak risk appetite leads to profit-taking in tech
Profit-taking also appears to have hit tech stocks, which are trading at sky-high valuations after a sharp decline over the past few months.
Falling risk appetite, ahead of a closely watched Federal Reserve meeting and a historic policy shift from the Bank of Japan, saw investors take some profits in the stock market.
The AI hype has pushed Nvidia's valuation up by more than $200% through 2023, making the chipmaker the third-largest listed company on Wall Street.
Nvidia's rally has spilled over into other tech stocks as they see the AI boom. But these uncertain valuations leave them vulnerable to profit-taking.
