Chip Stocks Erase More Than $1 Trillion in Two Days

U.S.-listed chip companies lost more than $1 trillion in market value over two trading sessions as investors aggressively sold artificial intelligence-related stocks following disappointing results from chipmaker Broadcom and renewed concerns over elevated technology valuations.

The sharp decline marks one of the most significant setbacks for the chip sector since the AI-driven market rally began, sending shockwaves through Wall Street and prompting investors to reassess expectations for future growth.

The Philadelphia Semiconductor Index (SOX) fell approximately 8.5% on Friday, putting it on track for its steepest single-day decline since the market turmoil that followed the so-called “Liberation Day” tariff measures in April 2025.

Friday’s losses extended a selloff that began a day earlier after Broadcom reported quarterly results that failed to meet investors’ lofty expectations for its custom artificial intelligence chip business, a key area of growth that had helped fuel the company’s rapid rise over the past year.

The semiconductor benchmark has now fallen more than 10% in just two sessions, reflecting growing investor unease over stretched valuations across the technology sector after months of extraordinary gains.

The pullback comes at a particularly sensitive moment for markets, with attention also turning to reports that billionaire entrepreneur Elon Musk is preparing a major public offering of SpaceX next week at a valuation reportedly approaching $1.75 trillion.

Among the hardest-hit companies was NVIDIA, the world’s largest semiconductor company by market capitalization and one of the primary beneficiaries of the global AI boom.

Nvidia shares fell nearly 6%, wiping out more than $300 billion in market value in a single session.

Meanwhile, Micron Technology dropped 11%, erasing approximately $127 billion in market capitalization. Shares of Marvell Technology declined 12%, while AMD fell roughly 10.5%.

The scale of the decline highlights how heavily concentrated investor enthusiasm had become around AI-related companies, many of which have seen their valuations surge to historic levels over the past eighteen months.

Market participants suggested the selloff may represent a broader shift in investor behavior.

“Many investors had been buying every dip almost automatically,” said market trader Dennis Dick of Triple D Trading. “That strategy worked exceptionally well for a long time, but it is no longer producing the same results.”

The comments reflect growing concerns that market participants may be becoming less willing to overlook slowing growth rates, rising capital expenditures, or earnings disappointments among leading technology companies.

The semiconductor rout was exacerbated by renewed concerns about U.S. monetary policy.

Stronger-than-expected employment data released on Friday increased expectations that the Federal Reserve could maintain elevated interest rates for longer than previously anticipated, reducing the attractiveness of high-growth technology stocks whose valuations are particularly sensitive to borrowing costs and discount-rate assumptions.

The broader market came under pressure as a result, with the S&P 500 falling approximately 2.3% during the session.

Rising Treasury yields and persistent inflation concerns have prompted investors to question whether the next phase of the AI-driven bull market can sustain the extraordinary pace of gains recorded earlier this year.

At the heart of the selloff was Broadcom, widely viewed as one of the biggest winners from the artificial intelligence revolution.

The company’s shares declined 7.5% on Friday, extending a two-day slide to nearly 19% as investors reacted to signs that demand for certain AI-related products may not be growing quickly enough to justify the market’s most optimistic forecasts.

Although semiconductor stocks remain up roughly 75% year-to-date, the sharp correction has exposed growing vulnerability in a sector that had become one of the most crowded trades in global financial markets.