Nvidia CEO Jensen Huang’s recent statement at the Consumer Electronics Show (CES) that practical quantum computers are still two decades away sent ripples through the quantum computing stock market. Sector leaders like Rigetti Computing (RGTI), IonQ Inc (IONQ), and Quantum Computing (QUBT) experienced significant declines, with share prices plummeting over 40% during Wednesday’s trading session.
Huang’s remarks, made during a Q&A session following his keynote address at CES, contrasted with the previous day’s excitement surrounding Nvidia’s latest product announcements. These included the powerful GB10 superchip, designed for a compact desktop system called Project DIGITS, and the open-source Cosmos platform for developing physical AI systems, including advancements in humanoid and self-driving robotics.
Despite Nvidia’s (NVDA) stock reaching a record high before Huang’s presentation, it subsequently fell more than 6% on Tuesday. While Wednesday saw the stock close relatively flat, pre-market trading on Thursday indicated a further decline of nearly 1%. Charu Chanana, chief investment strategist at Saxo, suggested that the sell-off might be attributed to the “buy the rumor, sell the fact” phenomenon. While Nvidia’s innovations are impressive, much of the demand for its current AI hardware was already factored into market expectations.
This lack of immediate revenue catalysts may have disappointed investors seeking short-term gains. However, Chanana emphasized that Nvidia’s long-term growth prospects remain strong. Adding to the pressure on Nvidia, Bloomberg reported that the Biden administration is considering further restrictions on AI chip exports, potentially impacting companies like Nvidia. Neither the Commerce Department’s Bureau of Industry and Security nor Nvidia offered immediate comments on the report.
In other market news, wholesale retailer Costco (COST) reported December net sales of $27.52 billion, a 10% increase compared to the same period last year. E-commerce sales benefited from the later timing of Thanksgiving, Black Friday, and Cyber Monday. Costco’s shares remained largely unchanged on Wednesday but showed a nearly 2% increase in pre-market trading on Thursday. The company’s ability to surpass first-quarter estimates despite a challenging consumer environment highlights its resilience. CFO Gary Millerchip attributed this success to offering customers new, high-quality items at attractive prices.
eBay (EBAY) experienced a 10% surge in share price on Wednesday following Meta’s (META) announcement of a pilot program to integrate eBay listings into Facebook Marketplace in the US, France, and Germany. This move follows the European Commission’s November decision alleging that Facebook Marketplace stifled competition in European online marketplaces. While Meta contests the decision and is appealing, the test launch represents an attempt to address the concerns raised.
Finally, UK retailer Marks & Spencer (MKS.L) saw its shares decline nearly 6% on Thursday, despite reporting positive Christmas sales figures. The broader sector downturn and the company’s cautious outlook for the upcoming year, citing economic uncertainty and rising costs, contributed to the decline. This sentiment echoed across the UK retail sector, impacting companies like Tesco (TSCO.L) as well, despite strong Christmas performance.
Several other companies, including Advanced Micro Devices (AMD), Unite (UTG.L), B&M European Value Retail (BME.L), Hilton Food (HFG.L), Fast Retailing (9983.T), Seven & i Holdings (3382.T), and Constellation Brands (STZ), also made headlines on Thursday. The market continues to react to a complex interplay of factors, from technological advancements and geopolitical decisions to economic uncertainty and consumer behavior.
