Nvidia (NVDA) is the technology giant that lifts Nasdaq (QQQ) and three notable firms. On Tuesday, Super Micro Computers (SMCI), ARM Holdings (ARM), and Broadcom (AVGO) all fell. Markets are fearful that Nvidia will announce a delay or limited production for its next-generation AI server, Blackwell.
Markets are reacting to this potentially bad news in the wrong way. Blackwell’s delay would let SMCI sell through its excess inventory. In addition, SMCI’s pending stock split (10 shares for each one share held) increases its liquidity. This is a bullish event.
The selling pressure on ARM stock is expected. The stock trades at a forward price-to-earnings ratio of 87 times. In the second quarter, Intel (INTC) sold nearly 1.2 million ARM stock and received nearly $150 million. Intel needs the cash to pay down its debt and cover expenses. Moody’s downgraded Intel, citing high costs, unfavorable product mix, falling demand, and a loss in market share.
The 4.05% drop in Broadcom’s stock price whenever the price approaches around $160 is a bearish pattern. Nvidia’s results have minimal impact on Broadcom’s prospects. Additionally, the firm announced its partnership with Hitachi Vantara (HTHIY). It will introduce a new cloud solution for artificial intelligence.
The new solution combines Vantara’s Unified Compute Platform with Broadcom’s VMware Cloud Foundation.
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