On Tuesday, the semiconductor sector experienced a significant downturn, with three major players—Advanced Micro Devices (NASDAQ: AMD), Nvidia Corporation (NASDAQ: NVDA), and Super Micro Computer, Inc. (NASDAQ: SMCI)—feeling the impact. While AMD and Nvidia saw substantial losses, SMCI experienced the most dramatic drop in stock price.
SMCI Experienced the Biggest Drop
Shares of Advanced Micro Devices and Nvidia Corporation tumbled on Tuesday as the semiconductor sector faced a broader market selloff. AMD’s stock price closed at $178.40, down $12.25 or 6.42% from the previous close of $190.65, while Nvidia’s shares ended the day at $854.41, a decline of $30.14 or 3.41% from the last close of $884.55.
Super Micro Computer, Inc. experienced the most significant drop among the three companies, with its shares plummeting by $134.83 or 13.47% to close at $865.85. The company’s stock had previously closed at $1000.68 and has traded within a 52-week range of $93.19 to $1229.00.
Why AMD, NVDA, and SMCI Stock Dipped Today
The stock prices of Nvidia, Super Micro Computer, Inc., and Advanced Micro Devices experienced declines due to various factors affecting the semiconductor industry.
Nvidia’s 3% dip followed the announcement of its new Blackwell AI chips, with mixed reactions from analysts despite a positive outlook on the company’s technology and market positioning.
Similarly, AMD’s stock price decline was indirectly tied to Nvidia’s movements, as concerns arose about the sustainability of AMD’s high valuation and the potential slowdown in AI infrastructure spending.
Super Micro Computer’s stock price significantly dropped after it announced a proposed public offering of shares, causing investors to be concerned about their holdings’ dilution. Just a day after the company joined the S&P 500, the announcement timing may have contributed to the negative investor sentiment.
The primary risks to these companies include the possibility of the AI infrastructure boom fizzling out, weaker-than-expected PC sales, and saturation in the AI market.
These factors could lead to a “trough of disillusionment” for technology stocks, as the explosive growth in sales and earnings that their high valuations rely on may not be sustainable in the long term.
Do you think is a “buy the dip” moment for semiconductor stocks? Let us know in the comments below.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
About the author
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
