Markets
markets
Luke Kawa

Nvidia slumps despite reassuring AI demand news from around the world

Nvidia’s business outlook is seemingly getting a boost from companies all over the world — but the stock is still retreating.

The chip designer bounced back from the worst one-day destruction of market value of a single company on Monday with a big gain on Tuesday, but is now down 2% in the premarket.

The dip comes after Dutch semi supplier ASML said its bookings were more than twice what Wall Street anticipated in the fourth quarter, and Japanese-based chip-testing equipment maker Advantest significantly upgraded its earnings outlook through March 2025. Nvidia has referred to Advantest’s US unit as one of its “industry leading suppliers.”

And DeepSeek AI isn’t the only Chinese entity to undercut the case for spending billions on Nvidia’s chips this week: Alibaba is also boasting of a best-in-class AI model.

Advantest CEO Douglas Lefever provided an indication that the AI boom may begin to lift more boats for broader semiconductor demand thanks to AI-enabled hardware (or its “edge” business), though perhaps not imminently. From the earnings call transcript (this appears to have been translated from Japanese, so it’s a little clunky):

“As far as edge, we have seen some goodness in edge compute when it comes to some of the consumer electronics in the handsets. A lot of the handsets now are equipped with a lot of AI compute capabilities and so that is leading to some business upside. But it’s clear that most of our business is going into more infrastructure level AI.”

If chipmakers are so eager to test chips and have more of the highest-power design systems, they must be pretty bullish about how much demand there’s going to be from the so-called hyperscalers, among others. But this optimism could be misplaced: reassurance from companies that are upstream from Nvidia is much less a vote of confidence than support from its downstream customers.

Thankfully, we’ve got Meta and Microsoft reporting after the close on Wednesday, which should shed some more light on this matter.

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Retail traders are “skipping the dip” this time

Here’s one noteworthy feature of the recent market downturn that has the S&P 500 poised for its worst week since reciprocal tariffs were announced in early April: retail traders seemingly aren’t eager to buy the weakness in single stocks the way they used to be.

JPMorgan strategist Arun Jain has flagged that retail traders instead appear to be “skipping the dip.”

“In contrast to the behavior observed during the post-Liberation Day selloff, retail investors did not seize the opportunity to buy-the-dip on Tuesday, with a few exceptions such as META,” he wrote of the day where the benchmark US stock index fell 1.2%. “In fact, they scaled back their ETF purchases and turned net sellers in single stocks.”

Then on Thursday, when the S&P 500 fell 1.1%, Jain projected that retail traders sold $261 million in single stocks. Through noon ET on Friday, his daily outflow estimate stands at $851 million.

With that intel, it’s little wonder why the carnage this week has been particularly intense in more speculative single stocks that had been favored by the retail community, including IREN, IonQ, Rigetti, Cipher Mining, Bloom Energy, and Oklo.

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Archer Aviation plunges on $650 million share sale following its third-quarter results

Air taxi maker Archer Aviation is deep in the red on Friday morning after reporting its third-quarter results after the bell Thursday. The stock is down more than 12%.

Investors don’t appear to be thrilled about the company’s $650 million direct stock offering, announced alongside its results.

The move marks at least the third major equity raise, and dilution, for Archer this year. The company raised $300 million from a new stock sale in February, and sold $850 million worth of shares in June.

On Archer’s earnings call Thursday, interim CFO Priya Gupta said the company came to the decision after “substantial inbound interest.” According to Gupta, the company has heard from government and commercial partners that liquidity is a “key driver to their decisions of who to partner with.” With its latest share sale, Archer said its total liquidity is more than $2 billion.

Archer Aviation sinks after reporting better-than-expected Q3 loss, announces it will acquire LA’s Hawthorne Airport

Archer Aviation sinks after reporting better-than-expected Q3 loss, announces it will acquire LA’s Hawthorne Airport

The move marks at least the third major equity raise, and dilution, for Archer this year. The company raised $300 million from a new stock sale in February, and sold $850 million worth of shares in June.

On Archer’s earnings call Thursday, interim CFO Priya Gupta said the company came to the decision after “substantial inbound interest.” According to Gupta, the company has heard from government and commercial partners that liquidity is a “key driver to their decisions of who to partner with.” With its latest share sale, Archer said its total liquidity is more than $2 billion.

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