TLDR
- SoftBank sold its entire stake in Nvidia to fund its own AI development investments
- Nvidia stock dropped more than 3% following the SoftBank stake sale announcement
- CoreWeave cut its full-year revenue forecast and saw shares fall 14% after a data center partner delay
- The S&P 500 fell 0.2% and Nasdaq dropped 0.7% while the Dow gained 0.5%
- The 41-day US government shutdown may soon end as the Senate passed a funding measure moving to the House
SoftBank Group announced Tuesday it sold its complete stake in chipmaker Nvidia. The Japanese conglomerate made the move to raise capital for its own artificial intelligence development projects.
Nvidia shares fell more than 3% after the disclosure. The chip company has been a major player in the AI market boom over the past year.
The sale comes as investors question valuations of AI-related stocks. Wall Street has started examining whether massive spending on AI infrastructure will generate returns.
SoftBank’s decision to exit its Nvidia position reflects the company’s strategy shift. The firm wants to build its own AI capabilities including compute resources, silicon chips, and data center capacity.
Market Reaction Splits by Sector
The broader market showed mixed performance on Tuesday. The S&P 500 declined 0.2% while the Nasdaq Composite dropped 0.7%.
The Dow Jones Industrial Average bucked the trend. It gained 0.5% thanks to lower exposure to technology stocks.
Tech stocks led Monday’s rally but faced selling pressure the following day. The Roundhill Magnificent Seven ETF fell 1.2% and the iShares Semiconductor ETF declined 1.8%.
More than two-thirds of both the Dow and S&P 500 component stocks traded higher. The declines in major indices reflected concentrated selling in large tech names.
CoreWeave added to tech sector concerns with disappointing guidance. The Nvidia-backed AI infrastructure provider trimmed its full-year revenue forecast.
CoreWeave Guidance Weighs on Sentiment
CoreWeave shares fell approximately 14% after the company’s announcement. The decline came despite the company reporting strong quarterly earnings.
A data center partner delay prompted the revised forecast. The company cited the partner’s timing issues as the reason for the reduced expectations.
Mizuho analyst Jordan Klein downplayed the SoftBank news impact. He described the stake sale as “immaterial in the grand scheme” relative to Nvidia’s market capitalization.
Klein noted SoftBank needs capital to expand into new areas. These include compute infrastructure, silicon development, and data center capacity.
The Senate passed a funding measure Monday evening to end the 41-day government shutdown. The bill now moves to the House for a vote.
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