Nvidia Stock Slumps Ahead of Earnings Call Amid Rising Memory Costs
Nvidia's stock plummeted over 2% on Monday, marking its seventh consecutive day of declines ahead of its upcoming earnings call.
The AI chipmaker is set to report its second-quarter earnings after the bell on Wednesday, a highly anticipated event following missed quarterly projections from other AI giants such as Meta in July.
Nvidia has informed its biggest customers that it will be increasing prices for servers with its AI chips by up to 15% next year due to rising memory costs, according to a Bloomberg report over the weekend.
This news comes amidst a broader slide in semiconductor stocks, with AMD, TSMC, and Broadcom all falling on Monday, and the Philadelphia Semiconductor Index dropping 2.7%.
Some critics have also raised concerns about Nvidia's practice of inking 'circular financing' deals, such as taking equity stakes in companies like OpenAI and Anthropic that are also its largest customers.
Despite this, many Wall Street analysts remain bullish on the company, which has achieved remarkable success to become the largest company by market cap in the world, worth around $5 trillion.