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Micron Technology: Semiconductor stocks extended their losses on Tuesday. The PHLX Semiconductor Index dropped more than 5%.
The decline reflects a broader pullback from one of this year's hottest AI-driven market sectors.
Nvidia shares fell roughly 1%. That followed a 5% drop on Monday. AMD shares slid more than 8%. Broadcom, Intel, Marvell, and Qualcomm also posted losses.
Memory and storage companies took a heavy hit. Micron Technology, SK Hynix, and Sandisk each fell more than 5% in US trading.
Chipmaking equipment suppliers weren't spared either. ASML, Applied Materials, and Lam Research all declined.
Global Losses Set the Stage
The US sell-off followed steep declines overseas. SK Hynix shares dropped more than 14% in South Korea.
Samsung Electronics fell more than 13% in the same session. European chip stocks also slipped.
Analysts pointed to worries over circular financing arrangements. Growing competition from Chinese chipmakers added further pressure.
Nvidia lost ground in another way on Monday. The company was overtaken by Apple as the world's most valuable firm.
That shift came after reports that Nvidia was negotiating to back $250 billion in funding for OpenAI. The deal is tied to a major data center project.
It follows a separate $500 billion strategic partnership with SK Group, announced Friday.
Chinese memory maker CXMT added to the unease. Its IPO in Shanghai this week revived fears about oversupply.
Investors worry the company's rapid growth could push memory chip prices lower.
A report from The Information added another blow. It said a Chinese state-backed firm has started mass-producing key chipmaking equipment.
The news triggered a drop in ASML shares.
A Sector Under Pressure
Semiconductor stocks drove much of this year's AI rally.
The sector hit a record high in June. Since then, chip stocks have fallen more than 20% from their peak.
That decline puts the group in bear-market territory.
Investor confidence has weakened. Many are questioning whether massive AI infrastructure spending will pay off.
Alphabet shares dropped sharply last week after the company raised its capital spending forecast for AI buildouts.
Attention now turns to earnings reports due this week from Microsoft, Amazon, and Meta.
All three are expected to signal further increases in AI spending. Any sign of a slowdown could rattle chipmakers further.
Rising concerns that the Federal Reserve may resume interest rate hikes have also weighed on investor sentiment.
Visual Disclaimer: This is an AI-generated illustrative portrait. It is used for creative representation and does not depict a real-time event. Created by AD News Live.
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