www.reuters.com, Aug. 01, 2024 –
Aug 1 (Reuters) - U.S. chip stocks plummeted on Thursday in their worst day since 2020 after a conservative forecast from Arm Holdings (O9Ty.F), opens new tab dampened investor optimism about artificial intelligence and data signaled a cooling economy.
Shares of Arm sank 16% after the British chip designer's forecast sparked worries that returns from a spending frenzy on AI computing by Microsoft (MSFT.O), opens new tab, Alphabet (GOOGL.O), opens new tab, Amazon (AMZN.O), opens new tab, Meta Platforms (META.O), opens new tab and other megacaps would be slower to materialize than previously expected.
"Arm is responsible for a lot of the impact on semiconductors today after their guidance," said Art Hogan, chief market strategist at B. Riley Wealth.
"It's an important company, but perhaps not as important as we made it this year in terms of valuation," Hogan added.
Losses in chipmakers' shares and the broader market accelerated after a slew of data spurred concerns the economy may be slowing faster than anticipated while the Federal Reserve maintains its restrictive monetary policy.