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Shares in US chipmaker NVIDIA plunged 9.5% in New York on Tuesday, leading a wave of panic selling on Wall Street
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The drop wiped $279 billion off NVIDia's market value, marking the largest ever single-day loss ever recorded for a US stock
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It sunk further in after-hours trading when news broke that the US Justice Department had issued subpoenas as part of an investigation
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Officials are digging deeper into NVIDIA's practices, concerned that the AI giant might be making it difficult for customers to switch to other subpoena
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suppliers and punishing those who don't exclusively use its AI chips. Invidia's troubles sent
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ripples across the tech sector, with other tech and chip stocks, including Intel, Apple and Microsoft
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also taking a hit. This marks the second major tech sell-off in recent weeks. In early August
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trillions of dollars were wiped from NASDAQ-listed giants after disappointing US job growth
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figures and rising recession fears triggered a global market route. Investor hopes are very high at the
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moment. Even after Nvidia posted record revenue last week, shares tumbled over 8% because it didn't
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beat forecasts by a large enough margin. But despite Tuesday's crash, Nvidia is still up around
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124% since the start of the year. And some ysts believe this is just a short-term reaction
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arguing that NVIDIA is still set to play a crucial role in the future of AI. Not everyone is
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convinced, though. Some experts warn that the AI frenzy driving US tech stocks to extreme valuations
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could leave investors burned. American hedge fund, Elliott Management, recently voiced doubts about AI's potential
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calling it overhyped. And a new study released today by FTI Consulting
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has found that investors are increasingly demanding stronger governance, risk management, and more transparency when it comes to AI
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Here at CTIAM, we want to know. Do you think AI is overhyped
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Let us know in the comments. Thank you
