Tech stocks in the U.S. experienced a downturn on Friday, influenced by worries over the swift rise in AI investments and several disappointing earnings reports from the semiconductor industry. The Nasdaq Composite dropped by 1.2%, concluding a week where the tech-focused index struggled to hold onto its recent gains.
Semiconductor industry takes a hit
Among the significant decliners, Marvell Technology plummeted nearly 19%, reminiscent of Bitcoin’s early days, after disclosing that its data center revenue fell short of market expectations.
In light of these earnings, Bank of America downgraded the stock from “buy” to “neutral.” Additionally, Nvidia, the largest publicly traded semiconductor firm globally by market cap, saw a 3.3% decline on Friday.
The firm cited persistent uncertainties affecting its sales to China, primarily due to U.S. export restrictions on its AI chips.
Over the week, Nvidia’s stock decreased by 2.1%, marking the steepest weekly decline since May. A broader downturn among chip manufacturers caused the Philadelphia Semiconductor Index to slump to its lowest level since mid-April.
The S&P 500 also saw a retreat, down 0.6% for its largest single-day drop of the month, although it finished August up 1.9%. The selling in tech stocks is likely due to investors cashing in profits as the month concluded, particularly after a robust August where technology shares propelled the markets to record heights.
Tech stocks overextended amid China uncertainty
Even with hundreds of billions of dollars invested in data centers driving generative AI initiatives like ChatGPT, the actual revenues in this domain remain relatively modest.
According to Morgan Stanley, generative AI offerings from major cloud providers such as Amazon, Microsoft, and Google generated around $45 billion last year.
Marvell, a crucial supplier of custom semiconductors for these companies, is facing further challenges, including trade tensions and doubts regarding its growth outlook. Its shares, which had previously surged due to the AI hardware boom, have plummeted over 40% since the start of 2025.
Nvidia is currently awaiting clarification from the U.S. government regarding a deal to resume H20 chip exports to China, with the administration planning to collect a share of the revenue from those sales.
Chinese authorities have advised local companies against purchasing Nvidia’s technology, increasing efforts to bolster domestic alternatives. Cambricon, a prominent Chinese AI chip manufacturer, recently reported record profits and announced advancements that bring its products closer to Nvidia’s standards, causing its stock price to surge.
Shares of U.S.-based Super Micro Computer, a key player in Nvidia’s supply chain, fell 5.5% following reports of internal accounting issues.
Bitcoin’s price declines further into the weekend
As tech stocks and companies linked to AI navigate market volatility, Bitcoin is also experiencing significant risk-off sentiment.
Bitcoin’s price dipped below $108,000 on Saturday, entering the weekend down nearly 7% for the week and at its lowest level since July.
The selling pressure has intensified as investors respond to ongoing uncertainties regarding U.S. monetary policy, persistent inflation, and weakening labor market statistics.
