Tech Stocks Decline Amid AI Growth Concerns: Nvidia, Marvell, Super Micro Underperform

Tech stocks declined in August as investors questioned the limits to the growth of AI companies. Nvidia, Marvell Technology, and Super Micro Computer Inc. underperformed the broader market. The Nasdaq 100 closed down 1.22% on Friday and futures contracts are trading flat this morning. The uncertainty may impact the S&P 500, dominated by the "Magnificent 7" tech giants.

Tech stocks faced significant declines in August as investors began to question the sustainability of growth in Artificial Intelligence (AI) companies. Key players such as NVIDIA, Marvell Technology, and Super Micro Computer Inc. underperformed the broader market. The Nasdaq 100 closed down 1.22% on Friday, and futures contracts are trading flat this morning, reflecting the uncertainty that may impact the S&P 500, which is heavily influenced by the "Magnificent 7" tech giants [1].

NVIDIA, a leading AI accelerator, saw its stock drop despite strong quarterly earnings. The company reported impressive figures, with revenue of $46.7 billion surpassing estimates and adjusted earnings per share of $1.05 beating the consensus. However, concerns over the sustainability of its hyper-growth in the data center segment and geopolitical headwinds related to U.S. export restrictions on H20 chips to China led to a 3-5% stock decline in after-hours and pre-market trading [1].

Marvell Technology faced an even sharper decline, with its shares plunging over 11-13% in after-hours and pre-market trading. The company delivered record Q2 FY2026 revenue of $2.01 billion and adjusted EPS of $0.67, meeting Wall Street's expectations. However, the key disappointment stemmed from its Q3 revenue guidance, which fell short of analysts' forecasts. Investors were particularly unnerved by CEO Matt Murphy's indication that data center revenue would remain flat in Q3 before a projected significant increase in Q4 [1].

Dell Technologies also saw its stock fall, not due to a lack of demand for AI servers, but rather due to compressed profit margins stemming from high manufacturing costs and competitive pricing within the AI hardware market. The company's Q3 earnings guidance of $2.45 per share fell short of the anticipated $2.49, and a decrease in the AI server backlog raised questions about the sustained momentum of its AI server orders [1].

The immediate implications for the broader market are a rotation away from some of the leading big tech names and heightened sensitivity to earnings reports and macroeconomic indicators. The tech sector's recent correction reflects the broader market sentiment where "priced-for-perfection" AI-related stocks are highly sensitive to any perceived slowdowns or margin pressures, contributing to volatility amidst ongoing macroeconomic uncertainties and geopolitical tensions.

References:
[1] https://markets.financialcontent.com/stocks/article/marketminute-2025-8-29-ai-hype-meets-reality-nvidia-marvell-and-dell-stocks-tumble-amid-tech-sector-profit-squeeze-and-geopolitical-headwinds