Nvidia and AMD Stocks Plunge After Disappointing Outlook! What You Need To Know

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Nvidia Takes a Hit as AMD Outlook Disappoints, Dragging Down Chip Stocks

Ouch! Nvidia (NVDA) investors felt a tremor run through the tech world Wednesday. After rival AI chipmaker Advanced Micro Devices (AMD) offered a less-than-stellar forecast, the mood soured, sending a wave of caution through the semiconductor sector. Nvidia wasn’t immune to the fallout, and its stock took a tumble.

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AMD’s first-quarter results landed close to expectations, but sales missed the mark. Analysts were hungry for a bullish outlook, especially with the potential of AMD’s MI300 AI accelerator chips. The company did hint at bigger ambitions for MI300 over time, but the market was hoping for a more immediate supercharge.

The result? Disappointment settled over the Street, and at least a dozen analysts reined in their expectations for AMD stock. This dose of skepticism sent AMD shares plummeting 8.9%, taking Nvidia down 3.9% in sympathy.

It’s not all doom and gloom, though. Some analysts, like Evercore ISI’s Mark Lipacis, see the panic as an overreaction. With the AI chip market projected to explode, a slice of that huge pie is still a win for AMD. Nvidia, of course, is widely expected to maintain its lead in this burgeoning sector.

Image credit: Tom’s Hardware

But what about the broader chip industry? Skyworks Solutions, heavily reliant on the softening smartphone market, faced a brutal reality check. Their earnings barely squeaked by, but guidance for the next quarter painted a bleak picture. The consequence was a 15.3% nosedive for the stock.

And like a ripple effect, the Philadelphia semiconductor index (SOX), a bellwether for the industry, took a sizable 3.5% hit.

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