Nvidia and other semiconductor stocks with exposure to China and Taiwan rose early Thursday after an ugly sell-off Wednesday over geopolitical concerns. But chip stocks turned in mixed performances as the day progressed.
On Wednesday, the Philadelphia semiconductor index, known as SOX, tumbled 6.8%. The SOX includes the 30 largest semiconductor stocks traded in the U.S. On the stock market today, the SOX closed 0.5% higher. Earlier in the session, it was down as much as 1.2%.
Shares of semiconductor equipment vendors reacted negatively to news that the U.S. might increase trade restrictions on chip gear to China.
Shares of chipmakers pulled back on comments from former President Donald Trump — the current front-runner in the presidential election — that Taiwan should pay the U.S. for defending it from China.
Nvidia Stock Claws Back After Drop
On Wednesday, AI chipmaker Nvidia fell 6.6%. But on Thursday, Nvidia stock rose 2.6% to close at 121.09.
Other chip stocks posting big losses on Wednesday included AMD (down 10.2%), Arm Holdings (down 9.6%), Broadcom (down 7.9%), Marvell Technology (down 10.1%), Qualcomm (down 8.6%) and Taiwan Semiconductor (down 8%).
On Thursday, gainers included Broadcom (up 2.9%) and Marvell (up 0.4%). Losers included AMD (down 2.3%), Arm (down 2.1%) and Qualcomm (down 0.1%).
Semiconductor equipment firms led by ASML continued to lose ground on Thursday after their shares rose earlier in the day.
Barclays analyst Tom O'Malley said the semiconductor sell-off on the China and Taiwan news was overdone.
"This feels more like a net negative Semis reaction to the possibility of second Trump administration more than a derivative of the potential impact of either data point," O'Malley said in a client note. "We think the move is overblown."
Nvidia stock is on the IBD Tech Leaders list, along with AMD, Arm, Broadcom, Qualcomm and Taiwan Semi.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
