Nvidia and AMD rebound after AI chip rout as Asian markets slide
In brief
- Nvidia rose 2.78% to $186.64 Friday after a 9.3% drop Thursday, per Decrypt.
- AMD bounced to $449.04 after a reported 17.3% fall the previous day.
- KOSPI fell 6% Friday in South Korea; Taiwan's benchmark lost more than 8% for the week, Decrypt reported.
- Ballotpedia, cited by Decrypt, found voters favored limiting data centers in 40 of 41 contests.
Asia took the harder hit
Markets in Asia fell harder. South Korea's KOSPI fell 6% on Friday, per Decrypt, and Taiwan's benchmark index lost more than 8% over the week (its worst week in months). Decrypt also reported that TSMC shares hit their daily limit-down threshold during the selloff.
Citing Reuters, Decrypt said Taiwanese officials asked state-owned banks to help support stock prices. LeoDex News couldn't independently verify that request.
In the U.S., the US Tech 100 cash-market proxy gained 1.85% to 27,007.3 on Friday, according to Decrypt. It's still down more than 5.5% for the week.
One good day doesn't undo a week like that.
Politics, data centers and debt
Decrypt links part of the selloff to politics. In its analysis, the U.S. midterm elections added to fears that Democratic gains would bring tougher scrutiny of data centers. The outlet cited Ballotpedia, which found voters favored limiting data center development in 40 of 41 local ballot contests on November 3 (some of those votes were advisory).
Why does that matter for chipmakers? Decrypt said data centers are their biggest growth driver, and restrictions on them could delay orders or push construction elsewhere. Debt is the other pressure point, according to Decrypt. AI companies and their customers were spending heavily to build capacity, often before the returns were clear, and higher borrowing costs made that harder to sustain.
Reuters quoted market strategist Steve Sosnick warning that heavily owned stocks were already “priced to perfection.”
Correction or bubble?
Decrypt frames the selloff as an open question: is this a correction, or the start of a bubble bursting? A correction is a decline of at least 10% from a recent peak. That framing is Decrypt's analysis. It isn't a forecast, and LeoDex News isn't making one.
Chipmakers aren't the only ones tied to the AI build-out. Decrypt noted that former crypto miners were renting out their hardware amid the AI computing boom.
Frequently asked questions
What counts as a market correction?
A correction is a market decline of at least 10% from a recent peak. Decrypt reported that Nvidia and AMD both remain well below their October peaks even after Friday's rebound.
Why do local limits on data centers matter for chip stocks?
Decrypt said data centers are the biggest growth driver for chip companies. Restrictions on them could delay orders or push construction elsewhere. Ballotpedia, cited by Decrypt, found that voters favored limiting data center development in 40 of 41 local ballot contests on November 3, though some of those votes were advisory.
