What's Going On With Chip Stocks Nvidia, Broadcom, Taiwan Semi, Micron And Others Wednesday?

Chip stocks led by Nvidia Corp NVDA, Broadcom Inc AVGO, Taiwan Semiconductor Manufacturing Co TSM, Marvell Technology, Inc MRVL, ON Semiconductor Corp ON, Micron Technology, Inc MU are trading lower Wednesday in sympathy with Advanced Micro Devices, Inc AMD.

AMD stock maintained its downward trajectory since Tuesday after its quarterly print failed to impress the Street.

AMD reported third-quarter revenue of $6.8 billion, up by 18%, topping analyst estimates of $6.71 billion. The third-quarter EPS of 92 cents was in line with analyst estimates.

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Data Center revenue rose 122%, and Client segment revenue increased 29%. Gaming revenue fell 69%, and Embedded revenue declined 25% year-over-year to $927 million.

AMD expects fourth-quarter revenue of $7.2 billion-$7.8 billion, versus the analyst consensus of $7.54 billion.

The chip sector benefited from the artificial intelligence frenzy. However, the U.S.’s geopolitical tensions with China and the sustainability of capital-intensive AI technology prospects have kept analysts cautious.

Meanwhile, the sector noted changing dynamics among semiconductor companies, with tech giants forging partnerships to reduce dependence on Nvidia Corp NVDA.

Amazon.com Inc AMZN and Databricks forged a five-year deal for affordable AI-building services leveraging Amazon’s Trainium chips. ChatGPT parent OpenAI added AMD as an additional supplier in addition to Nvidia. OpenAI also tapped Broadcom and Taiwan Semiconductor to build its in-house chip.

Last week, Nvidia briefly claimed the title of the world’s most valuable company, with its market cap hitting $3.53 trillion, just above Apple Inc’s AAPL $3.52 trillion driven by unprecedented demand for its AI supercomputing chips.

Russ Mould, AJ Bell’s investment director, said that Nvidia’s chip demand remains strong as more companies integrate AI into their daily operations.

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