The Zhitong Finance App learned that during Friday's trading, Nvidia (NVDA.US)'s stock price fell 10%. This was the GPU manufacturer's worst performing day since March 2020. At that time, its market capitalization was only one-twelfth of the current market value of 1.9 trillion US dollars.
Nvidia and its rivals don't seem to have released any news that could cause the stock price to plummet. However, shares of Ultra Micro Computer (SMCI.US), a company that built Nvidia servers, fell more than 23% on Friday because the company said it would release earnings reports later this month, breaking its recent practice of providing initial results.
In recent quarters, including the same period last year, Ultramicrocomputer has announced strong sales and profits in advance. In January of this year, Ultramicrocomputer raised its sales and profit guidance 11 days before announcing financial results for the second quarter. The company will announce the results of the third fiscal quarter on April 30.
Like Nvidia, ultra-microcomputers have also seen sales soar in recent years due to strong demand for Nvidia-based computers (used to build artificial intelligence programs such as ChatGPT).
In addition to ultra-microcomputers and Nvidia, the two worst performing stocks in the S&P 500 index on Friday, investors also reduced their holdings in many semiconductor stocks before earnings reports were released later this month.
The VanEck Semiconductor Index, which focuses on chip stocks, fell 4.5% on the same day, while Arm (ARM.US) shares fell nearly 17% on Friday. Arm sells an intellectual property chip that is thought to complement artificial intelligence servers based on Nvidia's graphics processors. Nvidia's main GPU competitor AMD (AMD.US) shares fell more than 5%.
Since Ultramicrocomputer joined the S&P 500 index in March, its stock price has risen by about 151% this year, and by 246% in 2023. The stock price drop on Friday was the biggest since August 9, 2023, when it fell 23.4%. Meanwhile, Nvidia's stock price has risen by more than 58% since 2024.
Although ultra-microcomputers have received a huge boost due to their association with Nvidia, competition in the market is still fierce, and competitors including Dell (DELL.US) and HP (HPQ.US) plan to use Nvidia's latest generation Blackwell graphics processing units to build systems.