Following SK Hynix, a major supplier of Nvidia (NASDAQ:NVDA), raising questions over unclear semiconductor demand in 2025, chip stocks are under duress.
Shares of Nvidia, Arm (NASDAQ:ARM), and Micron (NASDAQ:MU) all dropped on Thursday as investors responded to warnings on supply changes and geopolitical concerns. Inspired by enthusiasm over the $100 billion AI infrastructure project, Stargate, supported by OpenAI, SoftBank (SFTBY), Oracle (NYSE:ORCL), and MGX, semiconductor stocks soared just a day ago.
That euphoria has swiftly cooled as questions about the future strength of AI-driven demand surfaced. Analysts at Needham say 2024 was a mixed bag for semiconductor firms. While artificial intelligence chipmakers prospered as tech companies invested billions to construct AI data centers, those depending on PCs, smartphones, and autos battled with weak demand and abundant inventory.
SK Hynix still finds strong demand for AI-related chips even with uncertainty ahead. However, experts caution that artificial intelligence expansion may slow down in 2025, hence lowering the difference between consumer-oriented and AI-oriented semiconductors.
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