European shares retreat from record highs as Nvidia CEO exit rattles AI trade

European shares opened lower on Friday, retreating from record highs scaled in the previous session, as uncertainty surrounding the artificial intelligence trade weighed on global markets following Jensen Huang's abrupt resignation as Nvidia CEO, Reuters reported.

The pan-European STOXX 600 index fell 0.2% to 662.64 points by 0808 GMT, with personal and household goods stocks leading sectoral losses, declining 1%.

Investor sentiment remained cautious amid concerns over the implications of Huang's departure for the future of AI development. According to Reuters, Huang's exit has raised questions about the direction of the technology industry, given his central role in building Nvidia into a major force behind the global AI boom and the network of deals that helped fuel the sector's expansion.


Also Read | Jensen Huang forfeits $108 million in unvested Nvidia equity

Despite Friday's decline, European equities have outperformed their US counterparts this week, supported by strong corporate earnings and the region's relatively lower exposure to AI-linked stocks.

The STOXX 600 crossed record-high levels earlier this week for the first time since August and has gained more than 2% so far this week, putting it on track for its strongest weekly advance since June. In contrast, the US benchmark S&P 500 remains more than 3% below its all-time high.

Goldman Sachs raised its 12-month target for the STOXX 600 to 700 points from 695, reflecting a positive outlook for European equities.

Technology stocks came under pressure on Friday as concerns surrounding the AI sector weighed on sentiment. Chipmakers Siltronic and Aixtron declined more than 1% each, while AI equipment manufacturers Schneider Electric and Legrand also traded marginally lower. The broader European technology sector slipped 0.6%.

Also Read | Japan's Nikkei set for biggest weekly gain in five months as AI optimism lifts sentiment

Richemont shares tumble after sales growth slows
On the corporate earnings front, shares of Richemont, the owner of luxury jewellery brand Cartier, dropped 7% after the company reported slower sales growth for the September quarter.

The Swiss luxury group posted a 13% increase in sales in the three months ended September, compared with 20% growth in the previous quarter, raising concerns over the pace of demand recovery in the luxury goods market.

The decline in Richemont shares added to the weakness in European equities, with investors weighing corporate earnings performance against renewed uncertainty surrounding the global technology sector.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)