Investors might be getting altitude sickness from the stratospheric climbs of artificial intelligence chipmakers and other AI stocks. Arm Holdings and Microsoft were among AI-themed stocks that fell on Tuesday.
After rocketing 104% over the last four trading sessions, Arm stock has pulled back, a day after another huge rally. On the stock market today, Arm stock dropped 19.5% to close at 119.98.
Last week, the AI chip designer beat Wall Street's expectations for its fiscal third quarter and provided a bullish outlook for the current period.
Meanwhile, Microsoft stock fell after the Wall Street Journal reported that early adopters of the company's AI assistant were questioning its worth.
Is Microsoft Copilot Worth The Price?
Corporate customers told the Journal that Microsoft's Copilot software for productivity applications is useful in some cases, such as transcribing and summarizing meetings. But Copilot is flawed for applications like PowerPoint and Excel, the Journal reported.
Microsoft told that Journal that some functions are still in preview mode. The software giant charges enterprises $30 a month per user for Copilot.
On Sunday, Microsoft promoted its Copilot offerings in an advertisement during the Super Bowl.
On Tuesday, Microsoft stock retreated 2.2% to close at 406.32. MSFT stock hit a record high of 420.82 on Friday.
AMD, Nvidia Get Positive Analyst Reports
Elsewhere on the stock market, some chipmakers with exposure to the artificial intelligence boom swung wildly on Tuesday. Those AI stocks included Advanced Micro Devices and Nvidia.
AMD stock fell as much as 4.4% in intraday trading and at one point was up 0.7%. It ended the day down 0.2% to 171.54. AMD notched an all-time high of 184.92 on Jan. 25.
Nvidia stock fell as much as 3.6% in early trades but soon rebounded. In midday trades, it was up 1.7%. But it closed the regular session down 0.2% to 721.28. NVDA stock reached a record high of 746.11 on Monday.
AMD and Nvidia both received positive reports from Wall Street analysts, which buoyed their shares.
UBS analyst Timothy Arcuri reiterated his buy rating on Nvidia stock and raised his price target to 850 from 580.
Mizuho analyst Vijay Rakesh kept his buy rating on Nvidia stock and upped his price target to 825 from 625. He also raised his target on buy-rated AMD stock to 200 from 175.
AI Stocks In The Spotlight
Other chipmakers deemed AI stocks also fell on Tuesday.
Broadcom stock fell 1.1% to 1,251.65 on Tuesday. Marvell Technology stock slid 3.3% to 68.13.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
