Why NVDIA, AMD and Super Micro Computer Are Down Big Today

• StockStory Top Pick SMCI +1.08% AMD +3.93% NVDA +1.37%

Quick Read

• Nvidia (NVDA) erased $300B in market cap after Meta entered advanced talks to buy billions in Google chips instead.

• AMD dropped 6.4% and is down 22% over one month as Google’s TPU alternative shifts AI chip competition dynamics.

• Super Micro Computer fell 2.5% and has lost nearly 40% over the past month while struggling with accounting issues.

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On a day when the tech sector is doing its best to prop up market sentiment, some of its biggest names are lagging behind. Nvidia (Nasdaq: NVDA), Advanced Micro Devices (Nasdaq: AMD) and Super Micro Computer (Nasdaq: SMCI) are all under pressure as competition intensifies in the white-hot AI revolution. It may still be early innings for generative AI, according to industry leaders like Nvidia CEO Jensen Huang and Alibaba CEO Eddie Wu, but companies are already jostling for dominance, trying to knock rivals off their perch even as they also team up in what can only be described as a risky game. In a word, Alphabet's (Nasdaq: GOOGL) Google is responsible but Meta Platforms (Nasdaq: META) is not innocent, either. Let's take them one by one.

Nvidia Knocked Down but Not Out

In a reversal of fortunes, Nvidia stock has erased as much as $300 billion from its multi-trillion-dollar market cap today alone, dipping below the $170-per-share level. While NVDA stock has since come off of its lows, it remains down 4.2% in a sell-off marked by a target on the AI leader's back. It has barely been a week since Nvidia's blowout quarterly earnings, but how quickly investors forget.

Nvidia investors can chalk it up to Meta Platforms amid reports that Mark Zuckerberg's company is in advanced talks to purchase billions of dollars worth of Google's version of chips for its mega AI-powered data centers. Nvidia has come back swinging in a passive aggressive way, posting on social media that it is "delighted by Google’s success" and even continues to supply solutions to the search giant. Nvidia didn't stop there, reminding the industry that it is "a generation ahead" of its peers and remains "the only platform that runs every AI model and does it everywhere computing is done." The reassurance did little to lift Nvidia stock out of the doldrums today.

AMD Down in Sympathy

Things had started to look up for a beaten-down AMD stock at the start of the week. But today's selling has sent the stock down another 6.4% to barely above the $200-per-share level and widening its one-month declines to 22%.

Even though AMD competes with Nvidia, its stock could be lower in sympathy with its industry rival. After all, Nvidia's pain is Google's gain, but it also leaves AMD out in the cold. If the trend is leaning toward Google's TPUs as an alternative to GPUs, the stakes have changed in the volatile AI trade.

Super Micro Computer Sinks

Super Micro Computer, a partner of Nvidia, is losing 2.5% on the day, trading a far cry from its November high of over $50 per share. SMCI stock has shaved off nearly 40% of its value over the past month as it struggles to stay positive for the year and repair a tarnished reputation from accounting mishaps.

Since Super Micro reported its quarterly earnings, Wall Street analysts are mixed on the stock, split between "buy" and "hold" ratings amid AI uncertainty with an average price target of $46.82 per share. The selling could be emotional amid a lack of positive catalysts for now but traders continue to monitor the technical signals ahead of the next earnings report.

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