U.S.-traded semiconductor stocks experienced a sweeping selloff on Friday that eliminated more than $1 trillion in market value, driven by heavy declines among companies closely tied to artificial intelligence deployments. The PHLX chip index slid nearly 8.5% in afternoon trade, putting the group on track for its largest one-day percentage drop since Wall Street's "Liberation Day" tariff selloff in April 2025.
Friday’s rout deepened losses recorded on Thursday after Broadcom issued a quarterly report that indicated demand for its custom AI chips business fell short of expectations. The two-session move left the PHLX with a combined decline of more than 10%, even as the index remains up 75% year to date.
Individual large-cap names posted steep declines:
- Nvidia fell about 6%, shaving more than $300 billion from its market capitalization.
- Micron Technology tumbled 11%, erasing roughly $127 billion in value.
- Marvell Technology retreated about 12% after earlier gains.
- Advanced Micro Devices lost about 10.5%.
- Broadcom was last down 7.5%, extending a two-day decline of about 19%.
The scale of the declines concentrated in names benefiting from the AI investment cycle has prompted some investors to reassess the risk in richly valued technology positions. "You’ve had a lot of people here that were just blindly buying the dip," said Dennis Dick, a proprietary trader at Triple D Trading. "Blindly buying the dip had been winning you money, but that ended today."
Across the broader market, the S&P 500 fell 2.3% as worries about higher interest rates resurfaced after stronger-than-expected jobs data. The selloff in chips and other high-flying tech stocks occurred against the backdrop of a high-profile IPO scheduled next week for SpaceX at a reported $1.75 trillion valuation, a market event the article noted as occurring amid these fragile conditions.
Market participants viewed Broadcom’s results as a proximate trigger for the repricing of expectations around AI-specific chip demand, while macroeconomic signals heightened sensitivity to valuation and interest-rate risk. Although the PHLX remains well above its level at the start of the year, the recent two-day decline highlights the market’s vulnerability when both sector-specific and macro variables shift simultaneously.
Investors and strategists will be watching subsequent corporate reports and macro releases for clarity on whether the pullback reflects a transient rebalancing or a more persistent reassessment of growth and pricing expectations in the semiconductor sector.
Market snapshot: PHLX chip index down almost 8.5% in afternoon trade; combined two-day loss of more than 10%; S&P 500 down 2.3%.