Nvidia plunges 10%, marking its worst performance in over 4 years
Nvidia's stock price plummeted by 10% last Friday, marking its worst performance in over 4 years. Although there was no specific news causing the drop, a company based on Nvidia servers, Super Micro Computer, announced that it will release its financial report later this month, breaking its recent practice of providing preliminary results, leading to a drop of over 23% in Nvidia's stock price. In addition, semiconductor stocks were also affected by investor selling before the earnings reports, with the VanEck Semiconductor Index falling by 4.5%, and Arm's stock price dropping by nearly 17%. Super Micro Computer and Nvidia are among the worst-performing stocks in the S&P 500 index
According to the information from the Wise Finance APP, on Friday's trading, the stock price of NVIDIA (NVDA.US) fell by 10%, marking the worst performance for the GPU manufacturer since March 2020, when its market value was only one-twelfth of the current $1.9 trillion market value.
NVIDIA and its competitors did not seem to release any news that could have caused the stock price plunge. However, a company that builds servers based on NVIDIA, Super Micro Computer (SMCI.US), saw its stock price drop by over 23% on Friday, as the company announced that it will release its financial report later this month, breaking the recent practice of providing preliminary results.
In recent quarters, including the same period last year, Super Micro Computer has consistently announced strong sales and profits in advance. In January this year, the company raised its sales and profit guidance 11 days before announcing its second-quarter financial results. The company is set to announce its third-quarter results on April 30.
Similar to NVIDIA, Super Micro Computer has seen a surge in sales in recent years due to strong demand for computers based on NVIDIA (used to build AI programs such as ChatGPT).
Apart from Super Micro Computer and NVIDIA, which were the worst-performing stocks in the S&P 500 index on Friday, investors have also reduced their holdings in many semiconductor stocks ahead of the financial report releases later this month.
The VanEck Semiconductor Index, focusing on chip stocks, fell by 4.5% that day, while shares of Arm (ARM.US) dropped by nearly 17% on Friday. Arm sells intellectual property chips, considered a complement to AI servers based on NVIDIA graphics processors. The stock price of NVIDIA's main GPU competitor, AMD (AMD.US), fell by over 5%.
Since joining the S&P 500 index in March, Super Micro Computer's stock price has risen by about 151% this year and by 246% in 2023. The drop on Friday was the largest since August 9, 2023, when it fell by 23.4%. Meanwhile, NVIDIA's stock price has risen by over 58% since the beginning of 2024.
Despite the significant boost Super Micro Computer has received from its association with NVIDIA, the market competition remains fierce, with competitors including Dell (DELL.US) and HP (HPQ.US) planning to use NVIDIA's latest generation Blackwell graphics processing units to build systems