SUPERNEWS

Equities

China's Tech Influence Impacts Intel and AMD, Disney and Canopy Growth Show Positive Momentum

Tech stocks face headwinds as China plans to cut U.S. chip use, impacting Intel and AMD, while Disney and Canopy Growth see gains.

By Barry Stearns

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4/3, 08:15 EDT
Advanced Micro Devices, Inc.
Alibaba Group Holding Limited
Marvell Technology, Inc.
Micron Technology, Inc.
NVIDIA Corporation
Palantir Technologies Inc.
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Key Takeaway

  • Tech stocks, including Tesla, Intel, Alibaba, and AMD, face a downturn with the Nasdaq Composite index dropping 1%, amid China's plans to reduce U.S. chip use.
  • Intel and AMD shares fell by 2.5% and 2.3% respectively due to China's decision impacting the global tech sector.
  • In contrast, Disney shares rose by 1.3% after an upgrade by Barclays, while Canopy Growth surged 13%, indicating positive momentum in entertainment and cannabis sectors.

Market Dynamics

The second quarter has commenced with a challenging environment for technology stocks, as evidenced by the Nasdaq Composite index's 1% decline on Tuesday, with indications of a lower opening on Wednesday. This downturn reflects broader market sentiments and specific developments impacting key players in the tech sector. Notably, companies like Tesla, Intel, Alibaba, Taiwan Semiconductor Manufacturing, Advanced Micro Devices, Micron Technology, Marvell Technology, Nvidia, Super Micro Computer, and Palantir Technologies have experienced movements in their stock prices, with most trending downwards in early trading.

China's Influence on Tech Stocks

Recent developments have highlighted China's significant impact on the global technology sector, particularly concerning U.S. chipmakers Intel and Advanced Micro Devices (AMD). Reports indicate that China plans to reduce the use of U.S.-made microprocessors and servers within government computers, a move that could extend to the country's vast state-owned and corporate sectors. This decision is part of an ongoing technology war that could have profound implications for the chip industry. Intel and AMD, which count China as a crucial market, saw their shares fall by 2.5% and 2.3%, respectively, in premarket trading on Monday. This situation underscores the geopolitical tensions affecting the tech industry and raises the stakes for U.S. companies' success in their home market.

Positive Momentum in Entertainment and Cannabis

Contrasting the tech sector's headwinds, the entertainment and cannabis sectors have shown signs of positive momentum. Walt Disney's shares rose by 1.3% after Barclays upgraded the stock to overweight from equal weight, citing a narrative reset and potential for positive estimate revisions. This optimism is a testament to growing confidence in Disney's strategic direction and its ability to leverage its entertainment portfolio. Additionally, Canopy Growth experienced a 13% surge, marking its longest winning streak since January 2019. This rally highlights the increasing investor interest in the cannabis sector, buoyed by regulatory changes and market expansion opportunities.