Chip shares decline as SoftBank sells Nvidia stake; Paramount Skydance Pops

Semiconductor stocks came under pressure on Tuesday as a major investor sold his stake in Nvidia, the world’s most valuable company. Meanwhile, shares of the media and entertainment giant rose after the company boosted cost-saving goals and discussed huge investment plans.

Major US stock indexes ended the session mixed as investors awaited details about a possible end to the record government shutdown. The S&P 500 rose 0.2%, while the Dow Jones jumped 1.2%. The technology sector was the weakest performing sector, with the technology-rich Nasdaq index falling by 0.3%. to Investopedia Full daily market summary, click here.

Japanese holding company SoftBank (SFTBY) said it has sold its stake in artificial intelligence chip giant Nvidia (NVDA). SoftBank stressed that it is not giving up on artificial intelligence, noting that the proceeds from the sale of assets will help finance its investments in OpenAI, the company that owns ChatGPT. However, the move weighed on semiconductor stocks: Nvidia stock fell about 3%, while the PHLX index of chip stocks fell 2.5%.

The uncertainty surrounding the AI ​​boom has extended beyond the semiconductor industry to other areas exposed to the technology. Shares of nuclear power generator Vistra (VST), which has drawn attention for its opportunity to power artificial intelligence data centers, fell 4.8% on Tuesday. In its third-quarter earnings report, released last week, Vistra reported lower-than-expected revenue and a year-over-year decline in net income.

Viatris (VTRS) presented its strategic growth initiatives at the UBS Global Healthcare Conference on Tuesday, and shares of the drugmaker jumped 10%, the most of any stock in the S&P 500. The company forecast operating revenue growth of 2% to 3% excluding issues with a facility in India. Viatris also said it expects the new product launches to generate significant revenues and intends to return more than $1 billion to shareholders.

Paramount Skydance ( PSKY ) shares rose 9.8% after the entertainment giant released its first quarterly earnings report since the completion of the merger in August between Paramount Global and Skydance Media. The company has outlined major cost-cutting plans, including job cuts linked to asset sales in Argentina and Chile, and raised its cost-savings target. Paramount Skydance also raised its forecast for merger savings, highlighted ambitious investments in its studio and streaming businesses, and said it would raise streaming prices.

Package delivery giant FedEx (FDX) jumped 5.5% after CFO John Dietrich delivered a forecast for fiscal second-quarter earnings per share that beat consensus estimates. The upbeat outlook for the critical holiday quarter came as the shipping company and its peer United Parcel Service (UPS) faced challenges related to the grounding of their fleets of McDonnell Douglas MD-11 cargo planes following a devastating crash last week. UPS stock rose 2.1% today.

AppLovin (APP) shares fell 8.7%, marking the largest daily decline in the benchmark index. Although the mobile advertising technology company topped sales and earnings estimates in its most recent quarterly report, released on November 5, reports of an SEC investigation into AppLovin’s data collection practices weighed on the stock. AppLovin stock is up nearly 85% year to date, fueled by optimism surrounding Axon’s AI-powered platform.