Chip fell back into the red on Thursday, giving investors a tough peak into how the AI hardware maker’s earnings season will turn out, even if results beat expectations.
Chip trading had been hit hard as developments in Asian markets spooked investors. Importantly, semiconductor powerhouse TSMC announced solid profits, but it failed to boost its stock price. US-listed ADRs fell 2% shortly after the move, mitigating some of the pre-market losses.
That’s reminiscent of Samsung’s recent sell-off, which outperformed profits by most metrics, but the bar is high enough to have investors spooking for high-profile gains from the U.S. chipmaker in the coming weeks.
“Given all of this, one wonders what U.S. tech companies will have to come up with to really get investors excited again. This is important as earnings season accelerates several gears over the next two weeks,” David Morrison, senior market analyst at Trade Nation, said Thursday.
In the chip industry, memory manufacturers were hit the hardest. South Korean giants SK Hynix and Samsung plunged, pushing the KOSPI index down more than 6%, continuing the decline in Korean stock volatility.
The Nasdaq led the decline in U.S. stocks in this session. Here are the big drivers of chip trading:
- SK Hynix ADR: -8%
- Marvell Technology: -6%
- Micron Technology: -5%
- Intel: -4%
- AMD: -3%
- NVIDIA: – 2%
The trends in the major indexes as of 9:45 a.m. Thursday are as follows.
Prime Minister Scott Morrison said investors had mixed reactions to non-tech profits, even though many companies had reported generally strong results for the quarter.
“Earlier this week, the ‘big five’ US banks released their results. JPMorgan and Goldman Sachs jumped on the strong numbers, but the rest disappointed,” he said. “However, this seems to have more to do with investor expectations than poor corporate performance.”
Macro indicators showed subdued consumer and wholesale inflation this week, reducing the likelihood of a rate hike but did little to increase the likelihood of a rate cut. Reactions to the positive data have been largely lukewarm, especially as the United States and Iran appear to be embroiled in a seemingly endless conflict.
“Investors remain cautious as geopolitical risks continue to cloud the outlook. Tensions over shipping routes through the Strait of Hormuz remain high, but the United States and Iran exchanged additional attacks on Wednesday.”