US chipmaker stocks are in dire straits.

Intel CEO Pat Gelsinger stated that the company is undergoing its most significant restructuring since its chip transformation four decades ago. Over the past period, Intel has focused on developing chips that support artificial intelligence (AI), having lagged behind competitors like AMD and NVIDIA. However, the development of these new AI chips still requires more time to perfect. In addition, Intel has expanded its chip foundry business to produce chips for partners. This expansion has led to increased investments in factory construction, resulting in reduced business performance. Intel likely needs a considerable amount of time, combined with cost reductions, to achieve its future goals.

Meanwhile, although not experiencing the same "shocking" drop as Intel, both AMD and Qualcomm's stocks are also showing negative signs.

On March 7th, AMD's stock reached a record high in the company's history, hitting $211 per share. However, after the final trading session of the week, AMD's stock price had fallen to $132.5, a drop of nearly 40%. In the second quarter, AMD announced new AI-powered chips that were highly praised. Amidst these developments, despite occasional price increases, the stock has consistently trended downwards.

Meanwhile, on June 18th, many computer manufacturers simultaneously launched their Copilot+ laptop lines, which strongly support AI and run on Qualcomm's Snapdragon X Plus and X Elite platforms. These two chip lines are expected to usher in a new era for laptops. Qualcomm's stock price briefly reached approximately $230 per share on June 18th. However, the price gradually declined, and by the end of last week's trading session, it was around $159 per share, a decrease of about 30% from its peak on June 18th. Despite their many advantages, laptops integrating Snapdragon X Plus or X Elite chips running on the ARM architecture are quite expensive compared to laptops using traditional X86 chips.

NVIDIA "bubble" warning

Against this backdrop, NVIDIA, the "tech giant" on the US stock market, remains at a high level. In mid-June 2024, NVIDIA shares reached a record high of approximately $140, an increase of about 325% compared to $43 a year earlier. However, compared to that record high, the stock price closed last week down about 24%, at $107.2 per share.

Furthermore, the Financial Times reported on August 2nd, citing an assessment from Elliott Management, that investors are warning NVIDIA's stock price is in a "bubble." According to the report, while the AI ​​boom has boosted NVIDIA's value due to its strong AI chip capabilities, the increase in the company's stock price is "overhyped."

Recently, many large technology corporations such as Microsoft, Meta (owner of Facebook), and Amazon have spent tens of billions of dollars building AI infrastructure in recent months. Much of this money has gone to NVIDIA. However, many of NVIDIA's major customers, notably Microsoft, are pursuing plans to develop their own AI chips. Elliott Management is skeptical that Big Tech will continue to purchase large quantities of NVIDIA graphics chips for AI development. At the same time, the effectiveness of these AI investments appears to be "overhyped," as many applications are not yet ready for launch. Many AI development projects have not yet shown promising signs of commercial exploitation.