NEW YORK (AP) — Nvidia and other U.S. tech stocks are holding steadier on Tuesday but still flipping between gains and losses a day after tumbling on doubts about whether the artificial-intelligence frenzy really needs all the dollars being poured into it.
The S&P 500 was edging down by 0.1%, as of 9:55 a.m. Eastern time. The Dow Jones Industrial Average was down 37 points, or 0.1%, and the Nasdaq composite was 0.2% higher a day after sliding 3.1 %.
The spotlight remains on Nvidia, whose chips are powering much of the move into AI and whose stock has become a symbol of the surrounding frenzy. It rose 0.5% Tuesday after bouncing between initial gains and losses. But the moves were much milder than its plunge of nearly 17% plunge from the day before, its worst drop since the 2020 COVID crash.
Other AI-related companies also flipped from initial gains to losses, including a rise of 1% for chip company Broadcom and a drop of 3% for Constellation Energy, which had been been rallying on expectations it will help supply the electricity that vast AI data centers would gobble up.
They are under threat after DeepSeek, a Chinese company, said it was able to develop a large language model that can perform as well as big U.S. rivals but at fraction of the cost. That raises questions about whether all the spending expected for AI chips and electricity will need to happen.
AI-related stocks have been Wall Street’s biggest stars in recent years, soaring on expectations for big continued spending on what’s hoped to propel the next reshaping of the global economy. The gains, though, also created criticism that the stock prices had simply gone too high, too fast.
Outside of AI-related industries, stocks held up fairly well on Monday, and they were mixed Tuesday following a set of mixed profit reports.
Royal Caribbean steamed 7.3% higher after the cruise operator topped analysts’ profit expectations for the end of 2024. It benefited from stronger-than-expected demand from customers booking trips closer to the time of departure. The company also gave a profit forecast for the first three months of 2025 that toped analysts’ expectations.
JetBlue Airways, meanwhile, dropped 20.8% despite reporting a milder loss for the latest quarter than analysts expected. The company said it expects its costs outside of fuel to rise more quickly at the start of 2025 than a key underlying measure of its revenue.
Later this week will come profit reports from some of Wall Street’s most influential companies, including Apple, Meta Platforms, Microsoft and Tesla.
