Shares of NVIDIA Corporation (NASDAQ: NVDA) plunged 4.93% to $442.15 on Wednesday in the wake of a recent credit rating downgrade by Fitch.
Fitch, one of the central rating agencies, has downgraded the U.S. credit rating from AAA to AA+. The decision comes as Fitch cites concerns about fiscal deterioration over the next three years and repeated down-the-wire debt ceiling negotiations.
According to Reuters, this downgrade follows Standard & Poor’s (S&P) move to strip the U.S. of its triple-A rating, creating heightened economic uncertainty.
On the other hand, Advanced Micro Devices, Inc. (NASDAQ: AMD) is making waves with its exceptional second-quarter performance and ambitious plans in the artificial intelligence sector.
AMD reported non-GAAP earnings per share of 58 cents, beating the consensus estimate of 52 cents per share. Though revenue fell 17.56% year-over-year, it rose 0.94% sequentially to $5.36 billion, surpassing the Street consensus of $4.81 billion.
AMD’s CEO Lisa Su has outlined plans to ramp up production of the flagship MI300 AI chips in Q4, putting them in direct competition with the NVIDIA advanced H100 chips.
In an unexpected twist, AMD is also considering adopting a tactic akin to the Nvidia approach, aligning its MI300 and older MI250 chips with U.S. policies concerning China.
Analysts have widely regarded NVIDIA Corporation as the primary beneficiary in the AI market so far.
However, the growing demand for AI technology, driven by Microsoft Corporation (NASDAQ: MSFT) and Alphabet Inc.’s (NASDAQ: GOOG) substantial investments in data centers, as well as Apple Inc’s (NASDAQ: AAPL) launch of new iPhones, is fueling optimism for the AMD growth prospects.