AI stocks take center stage as top tech stocks continue to lose ground

U.S. tech stocks lagged on Monday due to massive sell-offs by retail investors, further dragging down the Nasdaq Composite. A CNBC report noted that investors were selling the major tech stocks holding up the bull market, including Nvidia and Palantir shares. The report further outlined that of the top 7 big tech companies, only Tesla shares recorded a spike of about 2% on Monday.

Nvidia lost 2%, Apple and Meta lost about 1% each, and Palantir also lost about 3.4% on Monday. Most tech stocks have seen a recovery in Tuesday markets, except Meta, which is still down over 0.4%.

Nasdaq, which has a considerable number of tech stocks in its portfolio, lost over 0.3%. While the S&P 500 and Dow Jones had an overall spike, the S&P 500 tech category lost about 0.9% on Monday.

Quantum computing also took a hit after several comments from Meta’s CEO, Mark Zuckerberg, and Nvidia’s Vice President, Jensen Huang, suggesting that the quantum computing era is still far from reality. Huang spoke during an analyst event last Tuesday, saying that the tech industry should wait at least 20 years for the proper introduction of quantum computing. Mark Zuckerberg spoke last Friday on The Joe Rogan Experience, mentioning that quantum computing is far from becoming valuable to the tech industry. 

Several quantum computing stocks have sharply plunged since last Wednesday, with Zuckerberg’s comments initiating more price slides within the sector. Rigetti Computing, D-Wave Quantum, Quantum Computing, and IonQ are among the biggest losers, recording 32%, 34%, 27%, and 14% losses, respectively. 

AI might boost the U.S. tech stock market

The report suggested that the ongoing AI boom might boost the U.S. stock markets despite the plunge in tech-related stocks. Recent earnings reports from Taiwan Semiconductor Manufacturing Co. (TSMC) and Foxconn have revealed an increased demand for AI-related products.  

The Counterpoint Research associate director, Brady Wang commented in a CNBC interview, saying that TSMC chips have proven highly efficient, with their capacity utilization exceeding 100%. Wang also suggested that AI GPUs and chips are driving the demand for TSMC and similar tech companies.

Nasdaq mentioned in a recent report that it expected several AI-related stocks to hit over $1 trillion dollar valuations due to increased demand and investment in the industry. The report also highlighted that Wall Street companies were betting on the rise in AI stocks in 2025. Nasdaq further pointed out the growing investment by companies like Apple, Nvidia, Microsoft, and Amazon in AI. 

The Biden-Harris administration limits AI chip exports

The U.S. government is still planning to limit the amount of AI chip and GPU exports from the U.S. to ensure the country’s dominance in AI markets. A January 13 announcement from the outgoing Biden-Harris administration outlined the new expectations for AI chip exports to preserve U.S. security and economic growth standards. 

Nvidia’s Vice President of Government Affairs, Ned Finkle, commented on the ‘AI Diffusion’ proposal, saying it is misguided. Finkle pointed out the necessity of autonomy in the tech industry to ensure innovation and economic growth within and outside the U.S.

The Nvidia executive hopes that Trump’s administration will find a proper way to implement the proposal to maintain the country’s global competitiveness in tech. 

The European Union has expressed concern about Biden’s decision, saying it was in the U.S.’s best interest for the region to continue purchasing advanced AI chips from the country without limitations. In a joint statement, the European Commission Executive Vice President Henna Virkkunen and Commissioner Maroš Šefčovič said that the EU cooperated in the field of security and was not a security threat to the U.S.

From Zero to Web3 Pro: Your 90-Day Career Launch Plan