Nvidia and AMD Fall as Treasury Yields Pressure AI Stocks
Nvidia shares fell 1.83% to $217.26 and AMD dropped 4.22% to $546.75 Thursday, amid higher Treasury yields and concerns over financing AI infrastructure. The declines came as part of a broader technology sell-off; the article said more than $1 trillion had been erased from 20 major AI and semiconductor stocks this week.
NVIDIA Corp. (NASDAQ: NVDA ) and Advanced Micro Devices Inc. (NASDAQ: AMD ) traded lower Thursday as investors pulled back from AI-linked stocks amid higher borrowing costs, concerns about financing massive infrastructure projects and intensifying competition. Nvidia and AMD are both down Thursday afternoon.
The weakness formed part of a broader global technology sell-off that has erased more than $1 trillion from 20 major AI and semiconductor stocks this week. Read Also: QUICK SPARK: Meet the 15 Worst-Performing Chip Stocks in the Last 7 Sessions Higher Rates Raise AI Funding Concerns Investors are increasingly questioning whether higher interest rates could make the huge capital investments required for AI infrastructure harder to finance. Broadcom CEO Hock Tan and Intel CEO Lip-Bu Tan also warned that financing constraints could become a bigger bottleneck for AI expansion than shortages of chips or power. Hotter U.S.
inflation data added to the pressure by increasing expectations that the Federal Reserve could tighten monetary policy further, CNBC reported. Ives Says Demand Still Looks Strong Yorkville Ives tech analyst Dan Ives told CNBC that rising Treasury yields above 5% are forcing investors to pay more attention to balance sheets and contract structures, but he separated the financing issue from underlying AI demand. "Higher yields raise the cost of financing these builds, and investors are right to focus on balance sheets and contract structure, but rates are a financing question, not a demand question," Ives said.
He viewed the pullback as a buying opportunity and said the AI infrastructure cycle remains in its early stages. "What would change our view is a demand signal, not a rate signal," Ives said, pointing to hyperscaler capital-spending cuts, canceled contracts or falling GPU rental prices as potential warning signs. See More: Top Momentum Stocks Competition Adds Another Pressure Point Concerns about future memory oversupply and China’s improving chip capabilities have also weighed on sentiment.
China’s CXMT recently disclosed progress on a denser memory architecture, adding to worries that increased production could intensify competition across the semiconductor supply chain. AMD, NVDA Price Actions: Advanced Micro Devices shares were down 4.22% at $546.75 and Nvidia shares were down 1.83% at $217.26 at publication on Thursday, according to Pro data. Photo via Shutterstock Read Also: NVIDIA's Rally in Trouble? Analyst Warns of Bull Trap