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Nvidia<\/a> H100 chips are still the hottest commodity in the tech industry, but sadly the same cannot necessarily be said about its stock.\u00a0<\/p>\n Shares in Jensen Huang\u2019s semiconductor company have plunged 20% since their all-time closing high on June 18th, usually considered to be the start of a bear market. Already roughly more than $780 billion have been wiped off its market cap, an amount equivalent to the entire value of Elon Musk\u2019s Tesla<\/a> or an Eli Lilly<\/a>, the pharma group behind the GLP-1 weight loss drug Mounjaro.<\/p>\n While the stock saw a relief rally, yo-yoing sharply higher on Wednesday, it only snapped back to last week\u2019s levels and the gains could prove short-lived as sentiment across the sector\u00a0remains fragile<\/a>.\u00a0<\/p>\n The Futurum Group, an industry research and advisory firm for the tech industry, told the\u00a0Financial Times<\/em>\u00a0the weakness was likekly just a rotation out of sectors that performed well over the course of the year as opposed to anything related to its underlying fundamentals.\u00a0<\/p>\n \u201cWe\u2019ve seen money flow out of Big Tech, mostly I think because they have had an incredible run-up,\u201d CEO Daniel Newman\u00a0said<\/a>, \u201cand that of course gave room for a little bit of a sell-off.\u201d\u00a0<\/p>\n Nvidia sells graphic processors best suited for training neural networks like transformers used in the development of OpenAI\u2019s GPT-4 and other large language models. Its most advanced chips are so powerful the U.S. imposes export controls to ensure they do not fall into the hands of strategic rivals like China.<\/p>\n Concerns have grown in recent weeks, however, that major cloud-computing providers\u2014including hyperscalers Amazon<\/a>, Microsoft<\/a> and Google\u2014as well as other megacap companies investing heavily in AI, such as Meta and Tesla, may not see a sufficient return on their investments.\u00a0<\/p>\n Microsoft predicted revenue growth in its Azure cloud business would\u00a0slow<\/a>\u00a0in the current first quarter from the 29% achieved in the three months through June, before accelerating in the second half of its fiscal year. Shares took a beating on Wednesday, heavily underperforming gains in the S&P 500 index.\u00a0<\/p>\n Another\u00a0major customer<\/a>\u00a0of Nvidia to\u00a0disappoint recently<\/a>\u00a0was Tesla, which needs AI training chips to solve autonomous driving\u2014something CEO Elon Musk promised he would finally crack this year or next. (He\u2019d previously promised Tesla cars could drive cross-country, on their own, by the end of 2017<\/a>.) So far this year he\u2019s spent $1.6 billion to bulk up his computing cluster, which trains on images fed from cameras mounted on all Tesla cars.<\/p>\n On an investor call last week, Musk said the lack of constant and reliable supply of Nvidia H100 chips is forcing him to double down now on\u00a0Dojo<\/a>, his own proprietary silicon optimized for vision-based machine learning. Musk has talked about renting out spare training compute to third parties, a \u201cDojo-as-a-service\u201d that Morgan Stanley<\/a> estimates can be worth\u00a0hundreds of billions<\/a>\u00a0of dollars. If successful, his custom silicon would pose a threat to Nvidia.<\/p>\n Even after the drop, Nvidia has still more than doubled its value since the start of January. But it\u2019s a far cry from the heady days of this spring when it eclipsed Apple<\/a> and Microsoft to become the largest company in the world, at one point worth over $3.3 trillion.\u00a0<\/p>\n The weakness has also affected its Taiwan production partner, TSMC, the world\u2019s largest foundry for fabricating microchips outsourced by third parties like Nvidia. Its stock has lost\u00a0roughly $200 billion<\/a>\u00a0over the past couple of weeks after breaking through\u00a0the $1 trillion mark<\/a>\u00a0at one point. It, too, is experiencing a relief rally.<\/p>\n \u201cNvidia stock has become a wasteland,\u201d said investor Jim Cramer, the host of CNBC<\/em>\u2019s\u00a0Mad Money<\/em> on Tuesday. \u201cIt\u2019s because Nvidia doesn\u2019t benefit from rate cuts, so its stock gets kicked to the curb in this environment.\u201d<\/p>\n Nvidia did not respond to a request for comment from Fortune<\/em>.<\/p>\n Later on Wednesday the Federal Reserve is\u00a0expected<\/a>\u00a0to lay the groundwork for a rate cut in\u00a0September<\/a>, its first since March 2020.<\/p>\n<\/div>\n\n\u2018Kicked to the curb\u2019 <\/h2>\n