Nasdaq Plunges 2.6% on AI Bubble Fears and Nvidia Capital Warning
The Nasdaq plunged 2.6% as Nvidia CEO Jensen Huang warned of capital shortages limiting AI growth, dragging down chip stocks in New York and Tel Aviv.
The Nasdaq index plunged by 2.6% amid growing concerns over the scale of artificial intelligence investments, following warnings from Nvidia CEO Jensen Huang about capital constraints limiting industry growth. Chip stocks in Tel Aviv experienced sharp drops, which deepened further after the New York market close.
Nvidia CEO Jensen Huang warned in a CNBC interview that while cloud service demand is at unprecedented levels, a capital shortage threatens to hamper industry expansion. This sentiment was echoed by market analysts at Wells Fargo, who noted that Huang's remarks amplify fears that credit and capital markets are nearing their risk-financing limits. Additionally, recent statements from Meta regarding the massive funding requirements of artificial intelligence further pressured the broader market.
On Wall Street, the Nasdaq index dropped 2.6% in its worst session since June, while the S&P 500 slipped 1.2% and the Dow Jones finished relatively flat. Local tech and chip shares mirrored these losses on the Tel Aviv Stock Exchange, with Camtek tumbling 5.7%, Tower Semiconductor shedding 4.2%, and Nova dropping 3.6% ahead of deeper post-closing declines in New York.
