San Francisco: US-traded chipmakers experienced a sharp decline on Friday, losing approximately $1.3 trillion in market value. The selloff was driven by deep losses in artificial intelligence heavyweights such as Nvidia, Micron Technology, and Advanced Micro Devices, following a weak report from Broadcom earlier in the week that reverberated across Wall Street.
Market Impact
The PHLX chip index slumped 10.3%, marking its steepest one-day drop since March 2020, when the coronavirus pandemic triggered global market turmoil. Friday's losses compounded a 12% decline over two sessions after Broadcom's quarterly report revealed that demand for its custom AI chips fell short of lofty expectations.
Investor Concerns
This downturn highlights growing investor unease about high-flying tech stocks, particularly as Elon Musk prepares for a blockbuster initial public offering for SpaceX next week at an exceedingly high valuation of $1.75 trillion. The chip index had hit a record high just on Wednesday, and despite the recent losses, it remains up 73% year to date.
Major Losers
- Nvidia, the world's most valuable chipmaker, fell about 6%, erasing more than $300 billion from its market capitalization.
- Micron Technology tumbled 13%, evaporating about $150 billion in market value.
- Marvell Technology, a recent investor favorite, gave back 17%.
- Advanced Micro Devices (AMD) lost almost 11%.
