2024-04-05 04:13:11 ET
With bullishness for the AI revolution in full swing, chipmakers like Nvidia (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD) seemed untouchable in their parabolic rises.
Until today, that is. AMD was down 8.26% today before markets opened.
This was after having lost almost $17 on its share price yesterday, closing at 165.83 on April 4 th after opening at 182.57.
Nvidia’s fall was even more pronounced, opening at 904.06 yesterday, only to close $45 down at just 859.05.
This has meant a 3.44% fall in stock price for the Magnificent Seven company in the past 24 hours. But why?
A chip in the supply chain
Both Nvidia and Advanced Micro Devices are highly dependent on their main supplier, chipmaking business TSMC (Taiwan Semiconductor Manufacturing Company).
TSMC itself was rocked this week by the earthquake and subsequent tsunami warnings in Taiwan, where it was forced to cease production and evacuate its factory staff in several key areas, due to the disaster.
In addition, TSMC announced that it was temporarily suspending production – including its 3nm process technology node, which allegedly accounts for more than 20% of TSMC’s revenue currently. However, production soon resumed again.
A second reason
A secondary possible reason for the volatility was market jitters, considering that the US Nonfarm Payrolls data is out later today.
On the whole, analysts are anticipating a positive report, forecasting nonfarm payrolls will rise by as much as 200,000, while jobless claims are expected to remain largely flat.
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