Both Nvidia and Super Micro Computer experienced significant losses in the AI trade, with their stocks declining by over 12%.

On Monday, the US recession fears caused a global sell-off on Wall Street, leading to a decline in the stocks of artificial intelligence that powered much of the market gains in 2024.

After Friday's disappointing July jobs report stoked recession concerns and worries that the Federal Reserve is behind the curve on cutting interest rates to boost the economy, investors in a risk-off mood dumped A.I. shares with high valuations from their portfolios.

Nvidia and Super Micro had lost more than 12% and 5% respectively before the bell on Friday. As of Friday's close, Nvidia was more than 20% off its highs, while Super Micro had already lost nearly half its value. The sector tracking declined 7% and looked poised to build on a 5.5% loss from Friday.

During premarket trading, megacap technology stocks experienced significant declines, with , and falling more than 5% each. slipped 4%, while shares slid nearly 7%. Additionally, Warren Buffett's Berkshire Hathaway disclosed over the weekend that it had sold off nearly half its stake in the iPhone maker.

Last week, major technology stocks, excluding Nvidia, completed a busy earnings season. Some of the results raised concerns that the anticipated benefits from heavy investments in AI are taking longer to materialize than anticipated.

UBS Global Wealth Management's chief investment officer, Mark Haefele, stated that markets are showing signs of impatience for proof that significant investments in AI are yielding returns for leading tech companies.

Jefferies' trading desk observed that semiconductor companies had a "disappointing beginning" to their earnings.

Over the weekend, it was reported that Nvidia has delayed the release of its latest AI chip by three months, potentially affecting major customers like Meta Platforms and Microsoft.

On Monday, technology shares experienced a sell-off, with Nvidia, Alphabet, and Meta Platforms declining more than 5%, and Microsoft dropping over 6%. This followed a rocky July for technology shares.