Nvidia and AMD rebound after AI chip selloff as data-centre doubts grow

Key points

• Nvidia gained 2.78% to $186.64 after falling 9.3% on Thursday; AMD rose to $449.04 following a 17.3% drop.
• South Korea's KOSPI lost 6% on 6 November and Taiwan's benchmark fell more than 8% over the week, with TSMC hitting its limit-down threshold.
• Ballotpedia found voters backed limiting data-centre development in 40 of 41 local contests on 3 November.

AI chip stocks bounced on 6 November after a selloff that ran from Wall Street to Asia, though the recovery only partly offset the previous day's losses. Nvidia rose 2.78% to $186.64 after dropping 9.3% on Thursday, while AMD climbed to $449.04 following a 17.3% fall. Both remain well below their October peaks, Decrypt reports.

The rout spread to Asian chipmakers. South Korea's KOSPI lost 6% on 6 November and Taiwan's benchmark fell more than 8% over the week, its worst in months, with TSMC hitting its daily limit-down threshold. The US Tech 100 proxy gained 1.85% to 27,007.3 but is down more than 5.5% in the week of 2 November.

Doubts about the AI trade predate the selloff. US midterm results sharpened fears of tougher scrutiny of data centres: Ballotpedia found voters favoured limiting development in 40 of 41 local ballot contests on 3 November. Data centres are chipmakers' biggest growth story, and restrictions could delay orders.

Decrypt distinguishes a correction, a fall of at least 10% from a peak, from a bursting bubble, when expectations prove unrealistic and funding dries up. It notes the dot-com crash cost the Nasdaq about 77% between March 2000 and October 2002, while current big AI spenders such as Microsoft and Meta are profitable. Reuters reported that the cost of insuring against a CoreWeave default has climbed above 1,000 basis points.

What to watch: Results from CoreWeave, Applied Materials and Cisco in the week of 9 November, plus inflation data, will show whether customers are still ordering capacity and equipment.

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