'AI bubble' resurfaces on Wall Street

NVIDIA·AMD, another simultaneous plunge

White House: "No federal-level support"

Technology stocks including NVIDIA and AMD fell in succession. Concerns grew that artificial intelligence (AI)-related stocks are overvalued.

On the 6th (local time) at the New York Stock Exchange, NVIDIA closed at $188.08, down 3.65% from the previous day. It fell about 9% over three trading days. Rival AMD plunged 7.27% to $237.70. With the sharp drop in share prices, market capitalization also fell to $386.9 billion.

As the 'AI bubble' resurfaced, selling pressure on large tech stocks appeared to continue. Dave Mazza, CEO of Roundhill Investments, said, "Today's sell-off is closer to a reality check," adding, "Stock prices had run well ahead of earnings, and if there is no new momentum to push prices higher, investors tend to take profits." Samir Samana, head of global equities at Wells Fargo, also emphasized, "AI optimism seems to have peaked," and "investor fatigue and wariness have grown."

David Sacks, the White House official in charge of AI and cryptocurrency, also said there would be no federal financial support for the AI industry, which influenced the stock decline. He wrote on X that "there will be no federal bailout for AI," and "there are at least five major companies in the U.S., so if one fails another will take its place." Earlier, Sarah Friar, OpenAI's chief financial officer (CFO), unveiled an investment plan worth $1.4 trillion while in the red and proposed that the government put in place safeguards to guarantee financing.

On the day, not only NVIDIA and AMD but AI-related companies' stocks fell across the board. Qualcomm and Broadcom fell 3.63% and 0.94%, respectively, from the previous day. According to Bloomberg, Oracle has largely given back the 36% gain recorded on September 10. At the time, Oracle's stock surged after it issued aggressive revenue guidance based on a cloud deal with OpenAI.

Reporter Han Myung-hyun wise@hankyung.com