Nvidia, Chip Stocks Extend Rout: Analysts Say OpenAI Deal Fears Overblown

Nvidia stock slipped 1% in premarket trading on Tuesday as chip stocks extended a broader selloff into a second day. Shares of Intel and Advanced Micro Devices fell over 3%, with the iShares Semiconductor ETF declining 2.4%.

Weekend reports that Nvidia was in talks to provide a roughly $250 billion backstop for OpenAI as part of a massive data-center project sparked the selloff, causing Nvidia to lose about $250 billion in market capitalization on Monday. However, Morningstar analysts said concerns around the deal were overblown. "AI token usage continues to rise exponentially," the firm noted, adding that Nvidia's broader strategy of enabling ecosystem players through financing arrangements remains sound.