Nvidia stock on track to end week down more than 10% amid investor concerns over AI valuations
Nvidia (NVDA) stock led a sell-off in tech on Friday, plunging as much as 4% as AI valuations continued to be top of mind for investors.
Concerns about an artificial intelligence-driven stock market bubble have led to bumpy trading for shares of the “Magnificent Seven” companies in the past week. Circular deals among key players in the AI boom have drawn comparisons to the dot-com boom and bust.
Nvidia’s stock decline caps a brutal week for the chipmaker, with shares on track to end the five-day period down more than 10% as of midday.
Read more about Nvidia’s stock moves and today’s market action
On Thursday, the stock slid along with other tech names as a Trump official said the government had no intention of backstopping the artificial intelligence industry, in reference to comments by OpenAI (OPAI.PVT) CFO Sarah Friar.
White House artificial intelligence and crypto czar David Sacks wrote on X, “There will be no federal bailout for AI. The U.S. has at least 5 major frontier model companies. If one fails, others will take its place.”
Sacks went on to say, “I don’t think anyone was actually asking for a bailout. (That would be ridiculous.) But company executives can clarify their own comments.”
The post was in response to remarks from Friar during a Wall Street Journal conference on Wednesday regarding the financing of chips.
Friar said the maker of ChatGPT could want a government “guarantee” that would make the financing of AI chips for data centers easier. OpenAI CEO Sam Altman later shot down the idea that the company is seeking a government guarantee to protect it against failure.
Chipmakers were already in the red on Thursday following Qualcomm’s (QCOM) quarterly results on Wednesday afternoon. The results were strong, but investors have been jittery due to concerns about overvaluation in the sector.
Earlier in the week, Nvidia CEO Jensen Huang told the Financial Times that China “will win” the AI race with the United States.
Huang later stated on X that China is “nanoseconds” behind the United States in artificial intelligence.
“It’s vital that America wins by racing ahead and winning developers worldwide,” he wrote.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.