US tech stocks were under pressure on Friday due to concerns over a rapid pace of AI investments and a series of disappointing earnings reports in the semiconductor sector. The Nasdaq Composite fell 1.2%, closing off a week when the Tech Heavy Index struggled to maintain its recent high.
The semiconductor sector was a huge hit
Among the notable tumblers, Marvel Technology plummeted nearly 19%, similar to Bitcoin’s early days, after revealing that data center revenues failed to meet market expectations.
The stock was downgraded from “purchase” to “neutral” by Bank of America in response to these earnings. Meanwhile, Nvidia, a globally listed semiconductor company with market capitalization, fell 3.3% on Friday.
The company has flagged the continued uncertainty in its sales to China. This is mainly due to US export restrictions that affect AI chips.
That week, Nvidia’s shares fell 2.1%, marking the first weekly drop since May. The broader weakness of chipmakers has dragged the Philadelphia semiconductor index to its lowest point since mid-April.
The S&P 500 fell 0.6% due to the largest day drop in the month, but managed to raise August by 1.9%. The sale of high-tech stocks is likely due to investors making profits near the end of the month, particularly after the hot August months of August, when technology led the market to record levels.
High-tech stocks are overheating, and China’s uncertainty is looming
Despite hundreds of billions of dollars already invested in data centers, it is driving generative AI projects like ChatGPT, but the real revenue in this sector remains relatively modest.
Generated AI products from leading cloud providers such as Amazon, Microsoft and Google have contributed roughly $45 billion last year, according to Morgan Stanley.
Marvell, the leading supplier of custom semiconductors for these companies, faces additional headwinds, including trade tensions and questions about its growth outlook. Stocks that had previously surged due to the AI ​​hardware boom have been hampering more than 40% since the start of 2025.
Meanwhile, Nvidia is waiting for clarification from the US government regarding the agreement to resume exporting H20 chips to China, with managers set up to collect revenue share from the sale.
Chinese authorities are discouraging local businesses from purchasing Nvidia’s technology and are stepping up efforts to support domestic alternatives. Cambricon, a leading Chinese AI chip manufacturer, recently posted record profits, demanding advances that bring products closer to Nvidia’s standards and bring stock prices high.
A key part of Nvidia’s supply chain, the US-based super microcomputer stock fell 5.5% after reporting internal accounting challenges.
Bitcoin prices will go down even further over the weekend
While companies related to high-tech inventory and AI are facing turbulence in their own markets, Bitcoin does not have the immunity of broader risk-off emotions.
Bitcoin prices fell below $108,000 on Saturday, falling towards the weekend, nearly 7% for the week, at its lowest point since July.
Sales accelerated as investors responded to persistent uncertainty to US monetary policy, sticky inflation and weakening of labor market data.
It is mentioned in this article
