Artificial intelligence (AI) concept stocks plummeted in Friday's trading session EST against the backdrop of overall broader market underperformance, with investors opting to take profits ahead of earnings announcements later this month.
Specifically, NVIDIA dubbed the AI leader, plunged 5%, continuing its recent downtrend, with shares falling back from a peak of $970 to the current $810. Among the big tech stocks, Nifty fell more than 9%, AMD dropped 4%, Meta fell 4.5%, and Amazon fell 3%.
For its part, AI trendsetter Super Micro Computer, a provider of high-performance and high-efficiency servers and storage systems with a focus on high-performance and high-efficiency servers and storage systems, and a long-standing relationship with Nvidia and Microsoft tumbled 20 percent, though the stock is still up more than 165 percent year to date.
Ultra Micro Computer will report its fiscal 2024 third-quarter results on April 30, the company said in an announcement on Friday. In January, Ultra Micro Computer raised its sales and profit guidance 11 days before announcing its fiscal second-quarter results. The latest, however, gave no hint of this, which may have been one of the factors that induced the decline.
While Ultra Micro Computer has enjoyed great success due to its partnerships with Nvidia and Microsoft, the market remains very competitive, with rivals including companies such as Dell and Hewlett-Packard.
Looking at the broader market as a whole, Israel's retaliatory strike against Iran sent ripples through global markets on Friday, and traders shied away from riskier assets ahead of the weekend, with the S&P 500 having lost the key 5,000 mark.
Israel moved on Friday to retaliate against Iran's previous massive drone and missile strikes on its territory. For now, it appears to be a limited attack aimed at avoiding a vicious cycle of gradual escalation that could otherwise push the two countries further into war.
Yonatan Touval, a member of the board of directors of the Israeli think tank Mitvim, wrote on X: "This was a 'de-escalation strike,' and barring unanticipated developments, Israel's strikes on Iranian territory earlier today may well be worthy of coining the new term. "
Much remains unclear about the scope or impact of this Israeli action, as well as uncertainty about the Iranian response, prompting traders to sell risky assets and buy safe-haven assets.
Kerry Goh, founder of Kamet Capital Partners, a joint family office, argued that the risk of an escalation in the conflict has prompted investors to take profits from the rise in tech stocks, a momentum that has also been driven by a growing belief among investors that U.S. interest rates will remain high for longer.
Along with the shift in the Fed's rhetoric, the market began to digest the reduced number of rate cuts during the year and the postponement of interest rate cuts, which seriously and severely dampened market popularity.
Chicago Fed President Goolsbee said on Friday that progress on inflation had stalled and that it was necessary to pause for a while to allow upcoming data to provide more information on economic developments. The day before, the New York Fed President Williams again expressed the view that "there is no rush to cut interest rates", and mentioned the possibility of interest rate hikes.
Landsberg Bennett Private Wealth Management Chief Investment Officer Michael Landsberg said: "U.S. equities have been falling in recent weeks, because the rate cut is expected to be revised downward significantly, and in the first quarter of the market performance after the strength of some investors chose to profit-taking, which is
