On August 5th 2024, the US stock market ushered in “Black Monday on Wall Street”, and many ongoing technology giants collectively plummeted. Global business magazine Fortune pointed out that this stock market crash shows that the artificial intelligence revolution has not yet truly arrived. The combined market value of the “Big Seven” (Alphabet, Amazon, Apple, Meta, Microsoft, NVIDIA and Tesla) has shrunk by more than $650 billion.
As early as a month ago, during the tech company earnings season, these technology giants failed to show Wall Street the returns on their huge investments in artificial intelligence. As panic breaks out across markets, investors are beginning to reassess their investment strategies.
Market Volatility for NVIDIA
Among them, NVIDIA’s volatility was extremely violent, with a drop of 15% at once. Although NVIDIA hit a record closing high on June 18th, its stock price fluctuated uneasily and eventually began to decline in early July. NVIDIA’s founder and CEO Jensen Huang sold $323 million worth of NVIDIA stock in July.
Dual pressure from technology and market
NVIDIA’s stock price plummeted not without reason. First, it was the major setback encountered by the Blackwell series of chips. NVIDIA informed Microsoft and at least one other cloud service provider that production of the Blackwell B200 AI chip will at least take 3 months longer than originally planned. The delay was due to design flaws discovered by TSMC during the manufacturing process. This delay may have a ripple effect on the entire artificial intelligence industry chain.
In addition, Groq, a Silicon Valley AI chip startup, raised $640 million in a round of financing led by BlackRock, valuing it at $2.8 billion. Groq is developing chips that can help artificial intelligence models extract text output from large language models faster. Groq CEO Johnathan Ross said in an interview with Fortune: “I don’t know if NVIDIA will notice how much of the pie we eat, but we will feel quite full off of it.” This has been interpreted as an open challenge to NVIDIA, trying to compete for market shares.
Challenges and Opportunities coexist
For NVIDIA, these challenges may only be temporary obstacles. Despite share price volatility, the company continues to push forward its leadership in artificial intelligence and image processing. However, with the increasing competition, especially pressure from various companies, NVIDIA must redouble its efforts to maintain a competitive advantage in the market.
Overall, this “Black Monday” is not only a shock in the market, but also an important sign of the future direction of the technology industry. Investors and industry observers are paying attention to how these giant companies respond to market challenges and how they promote the development and application of artificial intelligence technology.
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