Nvidia's Value Drops £130bn as Chipmakers Face Challenges
- ASML's warning on October 15, 2024, caused a 15% drop in its shares, leading to a £34 billion loss.
- Nvidia and Arm faced significant losses, with Nvidia's value reduced by £130 billion and Arm by £8 billion.
- The market's reaction underscores the vulnerability of the tech sector to external warnings and the potential for broader economic impacts.
On October 15, 2024, significant losses were reported across the global chipmaking industry following a warning from ASML, a leading supplier of chip manufacturing equipment based in the Netherlands. The company's shares plummeted over 15%, resulting in a loss of approximately £34 billion in market value. This downturn affected major players like Nvidia, which saw a £130 billion reduction in its value, and Arm, which lost £8 billion. The decline in the semiconductor sector coincided with a drop in oil prices, which negatively impacted oil stocks such as BP and Shell. The FTSE 100 index fell by 0.5%, reflecting the broader market's response to these developments. However, the decline in oil prices provided a boost to airline stocks, as lower crude prices are expected to reduce jet fuel costs. Additionally, housebuilders experienced gains amid speculation of potential interest rate cuts by the Bank of England, driven by recent economic data showing a slowdown in wage growth. Overall, the market reacted sharply to the warning from ASML, highlighting the interconnectedness of the tech and energy sectors and the potential for broader economic implications.