Xinyun Technology and AI concept stocks fall again, Nvidia’s volatility impacts the entire industry

Shashwat Chauhan

Reuters, November 13 - On Friday, shares of U.S. artificial intelligence-related companies declined again, with Xinyun Technology leading the fall, mainly driven by new concerns over AI financing triggered by the sudden departure of Nvidia CEO Jensen Huang.

The technology-heavy Nasdaq 100 Index .NDX fell 2.2%, and if losses persist until the market close, its market capitalization will shrink by nearly $870 billion. The Philadelphia Semiconductor Index .SOX also dropped 6%, wiping more than $670 billion off its market cap for the day.

AI-supported cloud computing startups CoreWeave CRWV.O and Nebius Group NBIS.O plunged 10.8% and 12.1% respectively, extending Thursday’s sharp declines when longtime CEO Jensen Huang resigned following an extramarital affair scandal.

Under Jensen Huang's leadership, Nvidia provided funding for the infrastructure behind its chips, a strategy that pushed up demand but also raised questions about circular funding flows between the chipmaker and its customers.

“This is a short-term fatal blow for the industry, because the supplier financing and financing guarantees previously provided by Nvidia and Jensen Huang are now gone,” said Thomas Hayes, chairman of Great Hill Capital LLC.

Additionally, UK cloud service provider Nscale, also backed by Nvidia (link), revised its IPO filing, stating it expects to record a net loss of $1.7 billion for the nine months ended September 30, further widening from a net loss of $433.3 million a year ago.

Chip stocks, widely seen as the biggest winners in the AI boom, also fell. Advanced Micro Devices AMD.O declined 10.2%, Broadcom AVGO.O fell 6.7%, following five consecutive sessions of gains for both stocks.

Memory chipmaker Micron Technology MU.O dropped 5.6%, while data storage companies Western Digital WDC.O and SanDisk SNDK.O fell by 7.7% and 9.3% respectively.

Photonics product manufacturers Lumentum LITE.O and Coherent COHR.N, as well as AI server makers Dell DELL.N and Hewlett Packard Enterprise HPE.N, all saw shares decline between 6.2% and 10.7%.

Utility and equipment suppliers affected by the AI frenzy, including GE Vernova GEV.N, Constellation Energy CEG.O and Vistra VST.N, saw shares fall by about 2% to 3.3%.

Most AI mega-cap stocks also fell, except Meta Platforms META.O, which rose 1.3%. Oracle ORCL.N, Alphabet GOOGL.O, Amazon AMZN.O and Microsoft MSFT.O declined between 0.1% and 3.6%.

Nvidia's quarterly report and the highly anticipated IPO of AI lab Anthropic are scheduled for release next week, potentially serving as catalysts for market sentiment around artificial intelligence.

“You simply can’t anticipate what Nvidia will bring. That’s the problem. For now, so much uncertainty shrouds this company,” said Steve Sosnick, chief market analyst at Interactive Brokers.

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