Investing.com -- Shares of most Asian firms that supply materials to Nvidia Corp (NASDAQ:NVDA) retreated on Wednesday in anticipation of hotly-awaited second-quarter earnings from the chipmaker, with particular focus on its outlook for artificial intelligence.
Japan’s Advantest Corp (TYO:6857), which supplies semiconductor testing technology to Nvidia, fell 1.7%, while South Korea’s SK Hynix Inc (KS:000660), which supplies Nvidia with memory chips, fell 1.5%.
TSMC (TW:2330) (NYSE:TSM) - also a key supplier to Nvidia, was an outlier, rising 1.3% after it dismissed rumors that its annual revenue was set to fall more than initially forecast.
Nvidia’s shares fell sharply from record highs on Tuesday as markets hunkered down ahead of its second-quarter earnings.
Nvidia is expected to report earnings per share of $2.07 on revenue of $11.1 billion, but its outlook for third-quarter revenue will be closely watched, given that it is expected to offer a barometer for AI demand.
Nvidia’s shares tripled in value this year after it clocked much stronger-than-expected first-quarter earnings and also forecast a sizeable bump in revenue on the back of increased AI development.
Wednesday’s earnings, which are due after the U.S. market close, are expected to show whether the chipmaker delivered on its AI forecasts.
A slew of brokerages also hiked their price targets on Nvidia ahead of Wednesday’s earnings.
Optimism over AI demand had fuelled a rally in Asian chipmaking and technology stocks earlier this year, with the sector now primed for more gains if Nvidia’s results exceed expectations.
The prospect of higher AI demand offers some respite to global chipmaking stocks, which are otherwise struggling with what is seen as a cyclical downturn after two strong years. Majors including TSMC and Samsung Electronics Co Ltd (KS:005930) had warned that AI demand may not be sufficient in supporting the industry through an ongoing slump in global chip demand.
Pressure from rising U.S. Treasury yields and a higher-for-longer interest rate outlook also weighed tech sector valuations, ahead of more cues on U.S. monetary policy this week.
Begin trading today! Create an account by completing our form
At One Financial Markets we are committed to safeguarding your privacy.
Please see our Privacy Policy for details about what information is collected from you and why it is collected. We do not sell your information or use it other than as described in the Policy.
Please note that it is in our legitimate business interest to send you certain marketing emails from time to time. However, if you would prefer not to receive these you can opt-out by ticking the box below.
Alternatively, you can use the unsubscribe link at the bottom of the Demo account confirmation email or any subsequent emails we send.
By completing the form and downloading the platform you agree with the use of your personal information as detailed in the Policy.