Nvidia’s disappointing revenue forecast pulls shares of chip makers lower

Nvidia Corp.’s disappointing quarterly revenue forecast dropped the stock as much as 10% and dragged the shares of other major chip makers down.

Advanced Micro Devices Inc. and Marvell Technology were among the stocks that fell more than 2% in post-market trading after Nvidia’s outlook, which the company attributed to China’s supply chain problems and the war in Ukraine. Other decline included Micron Technology Inc. and Western Digital Corp.

Shares of chip makers have been hit this year due to rising interest rates and concerns over slowing economic growth that could threaten to leave semiconductor companies burdened with excess inventory.

The Philadelphia Stock Exchange Semiconductor Index was down 27% this year compared to a 17% drop for the S&P 500.

As the leading US chip maker by market value and a key supplier of semiconductors used in data centers, Nvidia is regarded as an industry benchmark.

The company based in Santa Clara, California helped sparkle a broader rally in March when it pledged to use free cash to maintain growth with new products rather than pursue more aggressive share buybacks.

Chipmaker’s decline and worse-than-expected results from cloud computing firm Snowflake Inc. could weigh on tech stocks after the heavily tech-heavy Nasdaq 100 index rebounded from a new year low during the session.

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