Shares of chipmakers Advanced Micro Devices Inc. (AMD) - Get Report and Micron Technology Inc. (MU) - Get Report posted declines on Friday, Nov. 16, in tandem with Nvidia Corp.'s (NVDA) - Get Report stock, which dropped more than 18% after the company shocked Wall Street with a big quarterly miss.
Nvidia reported a miss on both its top and bottom lines for the third quarter after the market close on Thursday, Nov. 15, prompting investors to push the stock lower. By Friday's close, Nvidia shares were down 18.76%, at $164.43 on the Nasdaq stock exchange.
Shares of AMD and Micron fell in sympathy, with AMD's stock was down nearly 3.9% to $20.66, and Micron shares down almost 2% to $39.44.
Nvidia CEO Jen-Hsun "Jensen" Huang blamed a "crypto hangover" for the lower-than-expected results and guidance. Nvidia has enjoyed strong growth over the past two-plus years thanks to hot demand for its video-gaming cards, which crypto "miners" use to generate bitcoin and other digital currencies.
A drop in demand due to falling prices for cryptocurrencies has meant "mining" is no longer profitable, which in turn has reduced demand for Nvidia's products.
TheStreet.com's Jim Cramer correctly predicted a hit for Nvidia back in October. Cramer told TheStreet's Boot Camp for Investors, that's why his trust sold the stock well ahead of Thursday's numbers.
Broader expectations that demand for other types of chips including DRAM and NAND is slowing, particularly for smartphones, augmented the stock market declines Friday. DRAM prices fell 10% in October and are expected to continue dropping through the first quarter of 2019. NAND prices dropped roughly 15% lower in October.
(This story has been updated to show Friday's close.)