(Reuters) – U.S. semiconductor stocks fell on Tuesday after chip equipment maker ASML cut its annual sales forecast and a report said the Biden administration is considering limiting sales of advanced artificial intelligence processors to some countries.
AI chip giant Nvidia fell 4.4%, retreating from a record high the previous session that had put it on the brink of dethroning Apple as the world’s most valuable company.
Tuesday’s drop would reduce the AI chip giant’s market capitalization by about $138 billion to $3.25 trillion, widening the gap with Apple’s $3.58 trillion valuation.
Other chipmakers, including AMD, Intel, Arm, Broadcom and Micron, fell between 2.3% and 6.2%, sending the Philadelphia SE Semiconductor Index down nearly 4% and weighing on the Nasdaq index.
US-listed shares of ASML fell 12% after the Dutch company posted results ahead of schedule due to an apparent error, reporting weak bookings, cutting forecasts and predicting a slower recovery in chip demand outside the AI sector indicated.
“ASML’s big-finger error is not in itself a cause for concern, but the content of the message did not make reassuring reading for investors,” said Derren Nathan, head of equity research at Hargreaves Lansdown.
Separately, Bloomberg News reported Monday that U.S. officials are considering imposing a limit on export licenses for AI chips to specific countries — especially in the Persian Gulf region, citing national security concerns.
Washington is increasingly concerned that the Middle East could serve as a conduit for China to acquire advanced American chips that are not allowed to be shipped directly to the Asian country.
“With the AI revolution expected to play such a major role in increasing productivity and enabling other technological developments, it is not surprising that the US wants to do what it can to maintain its dominance,” says Danni Hewson, head of financial analysis at AJ Bell.
(Reporting by Akash Sriram and Jaspreet Singh in Bengaluru: Editing by Tasim Zahid)
