After Palantir (PLTR) peaked on Aug. 13, sellers exited or lowered their position in the AI software provider in droves. PLTR stock has fallen daily since then. On Aug. 20 (yesterday), the sell-off phase potentially ended. Palantir traders fought the day low of $142.34 to close at $156.01.
AI-related stock names are at risk of crumbling. The U.S. government may have overestimated its ability to prevent Chinese firms from obtaining Nvidia (NVDA) AI chips.
Buyers could get them through intermediaries operating in Thailand, Malaysia, Hong Kong, and other neighboring countries. Fortunately, AMD and Nvidia agreed to pay the government 15% on sales to China.
The bad news for NVDA stock is that China may no longer want its product. The Chinese government is concerned about rumors that Nvidia chips have a back door.
In Tuesday’s trade, Intel (INTC) fell by 6.99% while memory supplier Micron (MU) fell by 3.97%. Nvidia closed at 4.92% its all-time high of $184.48.
Your Takeaway
Investors exposed to the technology and AI chip sector should get ready to cut their positions. If Nvidia shares enter a downtrend to the $139 - $165 range, it would erase some of the recent gains.
Investors also need to be aware of Apple (AAPL), Amazon (AMZN), and Tesla (TSLA) stock performance. They led Nasdaq (QQQ) higher and could pull the index lower.
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