Nvidia CEO Jensen Huang, the AI chip powerhouse, continued its downward trend in Tuesday's premarket trading, falling nearly 1.86% as the stock deepened its position in correction territory. The company's shares have now dropped more than 10% from their all-time high of $148.88 reached last month.
The decline comes amid a striking contrast with competitor Broadcom, which has seen its stock surge 40% over the past five days. While both companies are major players in the AI chip market, their recent performances have diverged notably.
Broadcom's impressive rally was sparked by strong fourth-quarter earnings results and an optimistic revenue outlook that exceeded market expectations. Wall Street analysts, including Goldman Sachs, have responded by raising their price targets for the company's stock. Year-to-date, Broadcom shares have soared more than 120%.
Despite the recent correction, Nvidia remains a dominant force in the AI sector, with its graphics processing units (GPUs) being the preferred choice for training large AI models, including those developed by OpenAI's ChatGPT. The company's stock has gained over 160% this year, outpacing even Broadcom's substantial returns.
Broadcom's recent success stems from its focus on custom AI chips designed for hyperscalers - major cloud computing companies. During last week's earnings call, CEO Hock Tan highlighted the company's three-year AI opportunity, noting that major hyperscalers are beginning to develop their own custom AI accelerators.
The contrasting movements of these two semiconductor giants reflect the evolving dynamics in the AI chip market, where multiple players are vying for position in this rapidly expanding sector.