Nvidia's Revenue Guidance Sparks Tech Sell-Off in Asian Markets

Asia stocks fall as Nvidia rattles tech, but overall losses limited By Investing.com

Investing.com-- Asian stocks retreated on Thursday, pressured chiefly by losses in the technology sector following underwhelming guidance from market darling Nvidia, although expectations of lower interest rates helped limit overall losses. Declines in the tech sector were also relatively muted, given that NVIDIA Corporation (NASDAQ:NVDA) still beat expectations with its quarterly earnings. Analysts were seen maintaining a bullish stance on the firm. Regional markets took a weak lead-in from Wall Street, with U.S. stock index futures falling in Asian trade as concerns over Nvidia rattled the technology sector. The Dow Jones Industrial Average and the S&P 500 were also nursing a fall from record highs. Tech losses were weighted largely towards chipmakers, especially those with direct exposure to Nvidia- which fell as much as 8.5% in aftermarket trade. In Japan, chip testing equipment maker Advantest lost 0.5%, while Tokyo Electron shed 1.1%. Semiconductor Manufacturing International Corp (HK:0981)- the biggest chipmaker in China and a local rival for Nvidia, fell slightly. Broader technology stocks also fell, as Nvidia's earnings spurred some concerns that the so-called "AI trade" that had underpinned the sector over the past year was now losing more steam. Losses in tech also came amid a broader pivot out of the sector and into more economically sensitive stocks, as investors looked to lower interest rates in the coming months. Barring tech, losses in broader Asian markets were limited by buying into sectors poised to benefit from lower interest rates. Australia's ASX 200 fell 0.4%, benefiting from its lower tech weightage. The index had also shrugged off a stronger-than-expected reading on consumer inflation, released on Wednesday. China's Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 0.1% and 0.5%, respectively, languishing at over six-month lows amid little signs of improving sentiment towards the country. Futures for India's Nifty 50 index pointed to a mildly positive open, after the index appeared to have made more headway above the closely-watched 25,000 level. The Nifty and the BSE Sensex 30 were in spitting distance of new peaks. Recent dovish comments from the Federal Reserve cemented expectations for a September rate cut, which bodes well for stock markets. Focus this week is on U.S. gross domestic product data and PCE price index data- the Fed's preferred inflation gauge- for more economic cues.

Asian chipmaking stocks sink tracking Nvidia losses By Investing.com

Investing.com-- Asian chipmaking stocks fell on Thursday, tracking overnight losses in market darling Nvidia after the chipmaker's guidance on revenue and margins underwhelmed, raising concerns over the AI trade. NVIDIA Corporation (NASDAQ:NVDA) fell as much as 8.5% in after-hours trade as an underwhelming outlook on current quarter revenue and gross margin largely eclipsed an earnings beat and a $50 billion buyback from the chipmaker. CEO Jensen Huang also confirmed earlier reports that the firm was facing difficulties in producing its most advanced line of artificial intelligence chips, called Blackwell. The news sparked steep losses in Nvidia's stock, with losses spilling over into Asia, where several chipmakers have direct exposure to the AI giant. South Korea's SK Hynix Inc (KS:000660) was the worst performers of the lot, dropping 5.6% even as it unveiled a new generation of memory chips aimed at reducing power requirements. SK Hynix is a key supplier of advanced memory chips to Nvidia. In China, Semiconductor Manufacturing International Corp (HK:0981)- the country's biggest chipmaker and a local competitor for Nvidia, fell 1.3%. Losses spilled over from chipmaking stocks and into the broader technology sector, as Nvidia's underwhelming outlook raised questions about just how profitable the so-called "AI trade" was bound to be in the long run. Before Nvidia, middling earnings from several of its tech peers on Wall Street had pointed to rising costs and relatively muted returns from investment in AI. This notion weighed on broader Asian tech stocks on Thursday. China's BAT (LON:BATS) trio of Baidu Inc (HK:9888) (NASDAQ:BIDU), Alibaba (HK:9988) (NYSE:BABA) and Tencent Holdings Ltd (HK:0700)- all three of which have ongoing AI programs- fell between 1% and 3% in Hong Kong trade. Japan's SoftBank Group Corp. (TYO:9984)- which is exposed heavily to AI through its tech investments- fell about 2%. Softbank's unit- the British chip designing firm Arm Holdings (NASDAQ:ARM)- had fallen sharply on Wednesday and extended its losses after Nvidia's earnings.

US stock futures fall, Nvidia sinks after revenue guidance underwhelms By Investing.com

Investing.com-- U.S. stock index futures fell in evening deals on Wednesday, with losses geared towards technology stocks as market darling Nvidia dropped as an underwhelming revenue forecast eclipsed strong earnings. Nvidia's earnings spurred an extension in the flowsout of technology stocks seen in recent weeks, with the prospect of lower interest rates sparking plays into more economically sensitive sectors. This trade also sparked losses during Wednesday's session, with Wall Street indexes falling from record highs. While the firm clocked a stronger-than-expected profit for the May-July quarter and also announced a $50 billion share buyback, its revenue guidance for the current quarter disappointed investors hoping for better growth, especially after a year of outsized earnings. Nvidia forecast revenue of $32.5 billion, plus or minus 2%, compared to Reuters estimates of $31.77 billion and Bloomberg estimates of $31.9 billion. Reports from both publications suggested that Nvidia's forecast had missed the top end of some analyst expectations. Nvidia's gross margin also missed expectations in the July quarter, as did its margin outlook for the current quarter. The print sparked concerns that an artificial intelligence-driven boom in earnings was slowing- a trend that was more apparent in earnings from other major technology stocks, released in July. Nvidia was sitting on a 150% valuation spike this year on the back of hype over AI. The stock was also close to record highs, making it vulnerable to a heavy degree of profit-taking that had battered the broader tech sector. Other major technology stocks fell after Nvidia's earnings, with chipmakers bearing the brunt of losses. Wall Street indexes fell from record highs on Wednesday, as technology stocks were sold off in anticipation of Nvidia's earnings. The S&P 500 fell 0.6% to 5,592.18 points, while the NASDAQ Composite fell 1.1% to 17,552.44 points, and had severely lagged its peers in recent sessions. The Dow Jones Industrial Average fell 0.4% to 41,091.42 points, benefiting from its relatively lower weightage of technology stocks. Growing expectations of an interest rate cut in September had buoyed Wall Street indexes in recent sessions, although gains were this time more geared towards economically sensitive sectors. PCE price index data- the Federal Reserve's preferred inflation gauge- is due on Friday and is set to offer more cues on inflation.