On February 25, Artificial Intelligence-related stocks experienced a decline in anticipation of Nvidia's quarterly earnings report, which was expected to provide insights into demand and validate the sector's high valuations.
The global sell-off in technology stocks was triggered by a TD Cowen analyst report indicating that Microsoft is seeking significant data center capacity in the U.S. from private data-center operators.
Nvidia, a key player in AI technology, saw a 2.1% decrease before its highly anticipated earnings announcement, with investors closely monitoring the demand for its premium AI chips due to competition from more affordable models by China's DeepSeek.
Amidst reports of potential restrictions on Nvidia's chip exports to China and consultations about tightening chip controls, chip stocks, including Broadcom and Micron Technology, dropped around 2.1%, contributing to a 1.8% decline in semiconductor stocks.
Investor confidence in U.S. tech firms' substantial investments in AI infrastructure has wavered due to slow returns and advancements by Chinese startup DeepSeek.
The tech industry witnessed a range of declines, with companies like Digital Realty, Vertiv Holdings, and Super Micro Computer experiencing share decreases, alongside power companies facing pressure as data center demand rises for AI technology development.
Retail investor favorite Palantir, known for its AI trading analytics, also faced a 3.7% decline in its stock value.