The caution on the artificial intelligence bubble continued after Nvidia (NVDA) posted strong results. Shares sold off after the graphics chip giant reported strong results.
Nvidia is expecting strong growth for the rest of the year. However, stock markets are not convinced that the industry has enough capacity to meet that demand. The post-earnings slump hurt shares of AMD (AMD), Celestica (CLS), Coherent (COHR), Lumentum (LITE), and GlobalFoundries (GFS).
Shares of Marvell (MRVL) bucked the downtrend. MRVL stock jumped after the company reported a non-GAAP EPS of $0.80. Revenue increased by 22% Y/Y to $2.22 billion.
Overall, Nvidia is starting to exercise prudence with AI-related investments. On March 4, CEO Jensen Huang said that the $30 billion investment into money-losing OpenAI is likely its last. Before that, markets insinuated that Nvidia would invest up to $100 billion.
Oracle (ORCL) is also reportedly having debts with OpenAI. The database firm might not expand its data center in Texas.
Meta Platforms (META) might replace Oracle in paying for the leases related to the expansion. Meta is also reportedly considering training its AI models using in-house chips. That is a blow to Nvidia, Alphabet (GOOG) and its TPUs, and AMD.
Meta would benefit from in-house chips. It would cut costs and increase software development efficiency, since it has direct control of the chip’s designs.
