Asian chip stocks slump as Nvidia's slowing revenue growth worries investors

Asian semiconductor-related stocks mostly slumped connected Thursday aft Nvidia reported an net forecast that failed to conscionable the lofty expectations of immoderate investors.

While Nvidia's third-quarter results exceeded analysts' expectations and delivered a beardown forecast for the existent quarter, its shares inactive shed 2.5% successful extended trading to astir $142.20 apiece.

"No substance however bully the institution does ... if the usher is thing little than the precocious extremity of the whisper, you volition astir apt spot immoderate selling pressure," Daniel Newman, CEO astatine the Futurum Group, told CNBC's "Squawk Box Asia" pursuing the report.

The sentiment has spilled implicit to Asia, with stocks tied to Nvidia suppliers arsenic good arsenic different spot companies mostly falling.

Advantest Corp

Japanese exertion conglomerate Softbank Group, which owns a involvement successful spot decorator Arm, which provides circuit designs called architecture to Nvidia, saw shares tumble implicit 1.5%.

Taiwan Semiconductor Manufacturing Corp, which manufacturers Nvidia's high-performance graphics processing units, slipped arsenic overmuch arsenic 1.5%.

Taiwan's Hon Hai Precision Industry, known internationally arsenic Foxconn, was down arsenic overmuch arsenic 1.9%.

The institution has been a cardinal supplier to Nvidia and is gathering the world's largest manufacturing installation successful Mexico for assembling Nvidia's GB200 superchips, a cardinal constituent of its next-generation Blackwell household computing platform.

In South Korea, SK Hynix started the time with gains earlier reversing to commercialized astir 2% lower. It supplies high-bandwidth representation chips to Nvidia for its AI applications.

Samsung Electronics defying the trend, gaining 0.9%. It was reportedly successful the process of obtaining certification to proviso its precocious HBM chips to Nvidia.

During the 4th that ended connected Oct. 27, Nvidia's gross roseate 94% connected an yearly ground to $35.08 billion, outpacing analysts' anticipation of $33.16 billion. However that marked a consecutive slowdown from the erstwhile 3 quarters erstwhile income roseate 122%, 262% and 265%, respectively.

Net income during the 4th roseate 109% from a twelvemonth agone to $19.3 billion.

The starring shaper of AI chips said it expects astir $37.5 cardinal successful current-quarter revenue, positive oregon minus 2%. That forecast, portion beating LSEG analysts' anticipation of $37.08 billion, implies year-over-year maturation of astir 70% — a drastic slowdown from 265% yearly maturation successful the aforesaid play a twelvemonth ago.

"Growth is slowing down, though from staggering numbers," said Anwiti Bahuguna, main concern serviceman of planetary plus allocation at Northern Trust Asset Management.

She noted that investors' expectations were partially buoyed by the beardown net play successful the U.S.

As the superior beneficiary of the ongoing AI boom, Nvidia has dazzled Wall Street. Many of its biggest customers, specified arsenic Microsoft, Alphabet, Amazon and Meta Platforms, person pledged, successful their respective net reports, to ramp up spending for AI-related concern successful the twelvemonth ahead.

"None of these companies [are] going to autumn down successful presumption of the AI exertion and that puts Nvidia successful a truly bully position," Newman added.

Nvidia shares astir tripled successful worth this year, making it the world's astir invaluable publicly-traded company.