AI Stocks Slide Ahead of Nvidia’s Crucial Earnings Report
- tech360.tv
- Feb 26, 2025
- 2 min read
Artificial intelligence-related stocks fell on Tuesday as investors awaited Nvidia’s quarterly earnings, which could provide insight into AI demand and justify the sector’s high valuations.
Technology stocks declined globally after a TD Cowen analyst report revealed that Microsoft had cancelled leases for significant data centre capacity in the United States with at least two private data centre operators.
Nvidia, a key player in the AI sector, dropped 2.1% ahead of its earnings report on Wednesday. Investors are closely watching the company’s results, particularly demand for its high-priced AI chips, following the emergence of low-cost AI models from China’s DeepSeek.
AJ Bell Investment Director Russ Mould noted that market slowdowns before earnings reports are not unusual. However, he added that Nvidia’s results would be crucial for broader confidence in US equities.
Chip stocks also faced pressure after reports that the US government was considering further restrictions on Nvidia’s chip exports to China. Washington is reportedly consulting with allies about tightening chip controls on China.
Broadcom and Micron Technology each fell around 2.1%, while a semiconductor stock index declined 1.8%.
Investor concerns have grown over the billions of dollars US tech firms have invested in AI infrastructure, as returns have been slow and Chinese startup DeepSeek has made significant advancements.
Data centre operator Digital Realty slipped 1.2%, while Vertiv Holdings, which designs and builds data centre infrastructure, dropped 2.3%.
Power companies, expected to benefit from increased energy demand due to AI-driven data centres, also saw declines. Vistra fell 5.9%, and Constellation Energy dropped 3.3%.
Super Micro Computer, an AI server manufacturer, was among the worst performers on the S&P 500, with shares tumbling 8.7% ahead of the deadline for its delayed annual filing.
Palantir, a data analytics firm popular among retail investors for AI-related trades, declined 3.7%.
AI stocks fell ahead of Nvidia’s earnings report, which could impact market sentiment.
Nvidia dropped 2.1% as investors focused on demand for its AI chips.
US considering further restrictions on Nvidia’s chip exports to China.
Source: REUTERS
