Chip Stocks Slide as SoftBank Sells Nvidia Stake; Paramount Skydance Pops

Semiconductor stocks came under pressure Tuesday as a major investor sold its stake in Nvidia, the world’s most valuable company. Meanwhile, shares of a media and entertainment giant pushed higher after the company boosted cost-savings targets and discussed heavy investment plans.

Major U.S. equities indexes ended the session mixed as investors awaited details on a potential end to the record-setting government shutdown. The S&P 500 edged 0.2% higher, while the Dow jumped 1.2%. Technology was the weakest-performing sector, and the tech-heavy Nasdaq fell 0.3%. For Investopedia’s full daily market summary, click here.

Japanese holding company SoftBank (SFTBY) said that it sold its stake in AI chip behemoth Nvidia (NVDA). SoftBank stressed that it was not abandoning AI, noting that proceeds from the asset sale would help fund its investments in ChatGPT owner OpenAI. Still, the move weighed on semiconductor stocks: Nvidia sank about 3%, while the PHLX index of chip shares fell 2.5%.

The uncertainty surrounding the AI boom extended beyond the semiconductor industry into other areas exposed to the technology. Shares of nuclear-focused energy generator Vistra (VST), which has drawn attention for its opportunity to power AI data centers, dropped 4.8% Tuesday. In its third-quarter earnings report, released last week, Vistra posted 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 Tuesday, and shares of the pharmaceutical company jumped 10%, the most of any S&P 500 stock. The company projected 2% to 3% operational revenue growth excluding issues related to a facility in India. Viatris also said it expects new product launches to generate significant revenue and intends to return more than $1 billion to shareholders.

Paramount Skydance (PSKY) shares surged 9.8% after the entertainment giant released its first quarterly earnings report since the August completion of the merger between Paramount Global and Skydance Media. The firm outlined major cost-reduction plans, including job cuts tied to asset sales in Argentina and Chile, and lifted its cost-savings target. Paramount Skydance also increased its outlook for merger savings, highlighted ambitious investments in its studio and streaming business, and said it would hike streaming prices.

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

AppLovin (APP) shares tumbled 8.7%, posting the steepest daily decline in the benchmark index. Although the mobile advertising technology company topped sales and profit estimates in its latest quarterly report, released Nov. 5, reports of an SEC investigation into AppLovin’s data-collection practices b have weighed on the stock. AppLovin stock has gained around 85% year-to-date, boosted by optimism surrounding its AI-powered Axon platform.