NVIDIA Corporation (NASDAQ:NVDA) shares are trading lower on Wednesday, reflecting a broader downturn in the technology sector.

Semiconductor and chip stocks are experiencing declines, potentially influenced by the performance of Super Micro Computer Inc. (NASDAQ:SMCI) following its quarterly earnings report.

What To Know: Super Micro Computer reported mixed earnings performance for the fourth quarter. While revenues were in line with estimates at $2.18 billion, gross margins fell short of expectations due to a challenging customer mix and ramp costs related to liquid cooling.

The company reported an EPS of $1.52, which missed the analyst consensus estimate of $1.60.

What Else: Nvidia has successfully tested and approved Samsung Electronics' fifth-generation high bandwidth memory (HBM) chips, known as HBM3E, for use in its artificial intelligence (AI) processors.

This approval is a significant step forward in the collaboration between Nvidia and Samsung, with expectations that a supply agreement for the HBM3E chips will be finalized soon. Shipments are anticipated to begin by the fourth quarter of 2024.

HBM3E chips are crucial for processing vast amounts of data in complex AI applications, which positions them as an essential component for graphics processing units (GPUs) in the AI sector. Samsung expects that HBM3E chips will account for 60% of its HBM chip sales by the fourth quarter of this year.

The HBM market is projected to see substantial growth, increasing from $4 billion in 2023 to $71 billion by 2027. Currently, SK Hynix is expected to maintain its leadership position in the HBM market in 2024, with a projected market share of over 52%, followed by Samsung at 42.4%. Micron Technology, Inc. (NASDAQ:MU) is anticipated to hold just over 5% of the market share.

NVDA Price Action: Nvidia shares closed Wednesday down 5.08% at $98.95; after-hours, shares were up by 0.15% at $99.05 according to Benzinga Pro.

• Upstart Q2 Earnings: Taking a Look at Key Metrics Versus Estimates

Photo: Shutterstock