This article was originally published on ETFTrends.com.
Nvidia fell over 14 percent on Monday after it cut its fourth quarter revenue guidance to $2.2 billion from $2.7 billion.
“Deteriorating macroeconomic conditions, particularly in China, impacted consumer demand for NVIDIA gaming GPUs,” the chipmaker said in a statement.
It was reported last week that China’s economy grew at a rate of 6.6 percent last year based on numbers coming out of China’s government. The figure was in line with analyst expectations, but represented its slowest pace of growth in almost 30 years.
“The one thing with China is it’s not a made-up story. It’s not like companies are blaming just the Fed or the weather,” said Quincy Krosby, chief market strategist at Prudential Financial. “As we go through the week, if this becomes a theme in many different sectors, it’s going to lend urgency to the idea that the global economy is slowing and the need for more stimulus.”
SOXS gained 6 percent on weakness in the semiconductor sector. It's currently trading below its 200-day moving average.
Chips Starting to Dip?
Last week, Intel shares fell as much as 8 percent after the chipmaker reported lower-than-expected revenue for the fiscal fourth quarter. Earnings came in at $1.28 per share as opposed to the. $1.22 per share expected by analysts, according to Refinitiv.
Furthermore, revenue came in at $18.66 billion, falling below the $19.01 billion expected by analysts. Intel is also searching for new leadership after former CEO Brian Krzanich was ousted seven months ago.
SOXS can continue to gain momentum as the industry continues to face headwinds.
"With the semiconductor industry facing a number of headwinds, a including a slowing Chinese economy, soft smartphone sales, softening auto demand, slowing hyperscale demand, a lingering government shutdown, and ongoing trade war certainty, Intel has remained in a strong position relative to peers, with its own supply shortages likely insulating it from headwinds," said Weston Twigg, an analyst at KeyBanc Capital Markets. "However, we expect headwinds to mount in 1Q as data center demand likely continues to slow and Intel's new Apple modem business likely declines amid soft demand."
For more market trends in technology, click here.
POPULAR ARTICLES AND RESOURCES FROM ETFTRENDS.COM
- SPY ETF Quote
- VOO ETF Quote
- QQQ ETF Quote
- VTI ETF Quote
- JNUG ETF Quote
- Top 34 Gold ETFs
- Top 34 Oil ETFs
- Top 57 Financials ETFs
- Is it Still High Times for High Yield?
- ETF Launchers Grow Antsy as Government Shutdown Freezes SEC
- Remembering Jack Bogle, the Father of Indexing
- Tom Lydon on CNBC’s “ETF Edge”: The Two Faces of Retail
- An ETF that Views Value from a Different Angle