Nvidia’s half-trillion dollar loss leaves global chip stocks volatile

The annual computing trade show Computex, held in Taipei, Taiwan on May 30, 2017, featured the logo of Nvidia Corporation.

Global semiconductor stocks saw volatile trading on Tuesday following a significant decline in Nvidia shares during the previous session.

Early trading saw chipmakers in Europe and Asia face a decline in their shares, as investors reacted to Nvidia losing more than $500 billion in market capitalization in three trading days. However, some stocks managed to recover, with shares of the U.S. chipmaking giant up about 5.5% as of 11:40 a.m. ET on Tuesday.

Swiss semiconductor company STMicroelectronics saw its shares close the day down more than 1.4%.

In Europe, ASML, the Dutch chip equipment giant, initially suffered losses, but reversed the trend to close 0.18% higher as Nvidia shares recovered. ASML plays a crucial role in the global semiconductor market, manufacturing and selling extreme ultraviolet (EUV) lithography machines that chipmakers use to produce integrated circuits.

Soitec, on the other hand, saw a slide of 0.1%, while ASMI rose 0.6% after falling earlier in the session. The pan-European Stoxx600 closed around 0.3% lower.

Asian semiconductor stocks also witnessed a volatile day. Taiwanese company MediaTek, known for its potato chips, saw its shares fall 1.8%, while South Korean company Samsung fell 0.3%.

Meanwhile, TSMC, the world’s largest chipmaker, and SK Hynix managed to avoid negative sentiment, gaining 0.5% and 0.9%, respectively.

Nvidia stock rebounds

This followed a sharp decline in Nvidia shares for three consecutive sessions, resulting in a 13% decline from the all-time highs reached on Thursday.

On Monday, Nvidia fell 6.7%, marking its second-largest decline of the year. However, stocks began to recover in early trading on Tuesday.

Last week, Nvidia overtook Apple and Microsoft to become the most valuable U.S. company, with a market capitalization above $3.4 trillion. By the end of Monday, Nvidia had lost more than $540 billion in market value after hitting an all-time high during intraday trading on Thursday.

Nvidia said demand for its popular artificial intelligence graphics processing units (GPUs) remains high. Companies including Microsoft, Google, Amazon, Oracle and Half are investing billions of dollars in Nvidia chips to power their data centers and cloud services.

Later this year, Nvidia plans to start shipping its next-generation AI chips, known as Blackwell, which analysts say could kick off another phase of significant growth for the chipmaker and its partners.