Brutal session for chip stocks shows AI trade is turning
SMH•Chip stocks fell across markets as investors grew more cautious about AI spending and rising financing costs. The Philadelphia Semiconductor Index was down 1.5% Tuesday and on track for a sixth straight decline, while CoreWeave’s bond yield reached 15%.
1. Chip shares extend losses
Selling in AI-related shares deepened Tuesday. South Korea’s KOSPI fell more than 6%, extending its losing streak to five days, while the Philadelphia Semiconductor Index was down 1.5% and on track for a sixth consecutive decline. Micron Technology fell 5%.
2. Financing costs draw focus
The yield on a CoreWeave bond issued in June reached 15%, up from 9.625% at issue; its shares fell 4% Tuesday and were 49% below their 52-week high. Firmus, a data center operator backed by Nvidia, shelved a $5 billion Australian IPO last week as investor interest weakened.
3. Investors debate AI outlook
BlackRock’s research arm downgraded its US stock outlook to neutral, citing potential volatility around the AI buildout. The International Monetary Fund warned that the consequences of an AI correction could be global, while investors quoted in the article said the selloff may reflect positioning and financing costs rather than deteriorating AI demand.
