The 3rd quarter of 2024 had tech and IT stocks stumbling compared to the early months of this year, however following increased confidence and exceptional earnings, many of these stocks seem to have regained their momentum, whilst others are still finding their footing.
Nvidia
Nvidia is potentially the biggest name in AI right now, selling over 70% of the worlds AI chips, alongside arms in graphics, data, gaming and the automotive industry.
After the Fed’s September rate cut, and with talks of another before year end, confidence in the US economy is rising. Nvidia shares hit a new record on Monday. They increased by 2.4% by close, leading to a market cap of $3.39 trillion. Investors seem to have confidence in the industry and economy.
OpenAI
The company behind ChatGPT has recently secured $6.6bn in funding as they undergo many changes to their business structure. Companies such as Nvidia and Microsoft participated in this investment. Currently they are valued at $150bn.
At creation, OpenAI was a nonprofit designed to “benefit humanity as a whole”, but they were in discussion to switch their operations to a profit making business to attract investment and fight off hostile takeovers. However, their most recent announcement claimed that they are planning to restructure themselves as a public benefit corporation, which means that a company wanting to pursue a hostile takeover would have great difficulty. This also means that it will maintain a not-for-profit company. However PBC’s are very a very new concept and so the future of OpenAI’s Structure seems mildly uncertain.
TSMC
Taiwan Semiconductor Manufacturing Company is the worlds largest manufacturer of semiconductor chips and supplies these to Nvidia, AMD, ARM, Apple, Intel and others.
This week, with their Q3 Earnings release, they announced a 54% jump in profits YoY, vastly exceeding expectations. Alongside this they added that revenue growth this year was predicted to exceed 30%.
TSMC’s strong performance was likely due to recovery across all tech segments. Following the announcement their stock soared 10%, and Nvidia, Micron and AMD were also up nearly 1%.
ASML
ASML designs and manufactures chip making equipment for companies such as TSMC, Intel and Samsung.
ASML shares fell heavily on Tuesday after they warned of slower recovery in the semiconductor. Their Q3 sales were 50% of expected figures, their 2025 net sales forecast also fell to €30-35bn from a previous prediction of €40bn.
This then caused a ripple affect on many other tech stocks
- ASML (-16.3%)
- Nvidia (-4.5%)
- AMD (-5%)
- Arm (-6.9%)