The technology sector took a hit on Friday as chip stocks led the market lower. Nvidia (NVDA) saw a 4% drop in its stock price, while Intel (INTC) cratered over 27%. This decline came after a weaker than expected jobs report, which caused the Nasdaq to slip into correction territory.
Intel reported disappointing results on Thursday, missing on both the top and bottom lines. The company announced a $10 billion cost reduction plan, which includes cutting 15% of its workforce and suspending its dividend. This news, along with a cautious forecast from chipmaker Arm Holdings and a profit warning from Amazon, added to the negative sentiment in the chip trade.
Nvidia is facing a potential antitrust probe from the Justice Department, further weighing on the company’s stock. Wall Street’s patience with massive AI investments seems to be wearing thin, with Nvidia and other chip stocks ending the week in the red after a volatile few days.
Despite a brief surge earlier in the week, Nvidia is set to close out the week down roughly 7%. The stock, however, is still up more than 100% year-to-date. The entire chip sector saw a one-day jump on Wednesday, fueled by positive guidance from AMD and increased data center infrastructure spending from Microsoft.
AI chip suppliers like Nvidia may benefit from Big Tech’s investments, but the recent market turbulence has taken a toll on their stock prices. Nvidia’s rollercoaster week highlights the challenges facing the chip industry as investors navigate through uncertainty and market fluctuations.