Asian Chip Stocks Decline as Nvidia’s Outlook Damps AI Frenzy

(Bloomberg) -- Asian semiconductor stocks slipped as a less-than-outstanding outlook from key chipmaker Nvidia Corp. cooled investor sentiment on the artificial intelligence trade.

Among Nvidia suppliers, shares of Korean memory maker SK Hynix Inc. dropped as much as 6.8% while those of Japanese tester maker Advantest Corp. fell 3.6% and leading foundry Taiwan Semiconductor Manufacturing Co. dipped 2.8%. The Bloomberg Asia Pacific Semiconductors Index slid 2.7%, paring its gain for the year to about 22%.

“Nvidia had a good result yet share price was down on the back of big expectations for next year,” said Jun Bei Liu, a portfolio manager at Sydney-based Tribeca Investment Partners Pty Ltd. The cooling off in the shares after their strong performance this year “provides buying opportunities as long term structural growth remains intact,” she said.

The chipmaker’s shares fell more than 8% in late US trading after its revenue forecast missed the highest analyst estimates and it flagged production snags with its new Blackwell chips. The announcements may add to the concerns of AI overheating that had sparked the recent selloff and rotation into less-loved areas of the equity market.

That could lead to further profit-taking on a rally that has driven the Nasdaq 100 up 15% so far this year. Nonetheless analyst generally remain positive on Nvidia’s prospects.

“Tailwinds are still very significant,” Kyle Rodda, a market analyst at Capital.com, said in a Bloomberg TV interview. “We are just now talking it about it like a normal stock, asking if this is an appropriate risk to take at this price for this company or not.”