Semiconductor Stocks Plunge Amid Market Correction: Qualcomm Down 11%
Chip stocks pulled back from record highs after inflation concerns sent markets into risk-off mode, with Qualcomm falling 11% in its worst session since 2020 and the semiconductor ETF sinking 3%.
Major Stock Declines
Qualcomm plummeted more than 11% and headed for its worst session since 2020, with Intel dropping 7%, Skyworks Solutions declining more than 5%, and Marvell Technology losing about 4%. The iShares Semiconductor ETF tracking the sector sank 3%.
Market Drivers
Tuesday's declines followed a hotter-than-expected reading of a key consumer inflation measure as the war in Iran lifts oil prices, sending investors into risk-off mode. This represents a significant correction from the AI-driven rally that has dominated the sector.
Broader AI Trade Expansion
The recent rally has broadened the AI trade beyond chipmaking stalwart Nvidia, with skyrocketing demand for central processing units and graphics processing units underpinning large language models boosting chip stocks to records, and investors betting that the transition from AI training to agents will boost demand for other AI components.
Memory Chip Dynamics
Memory chip makers are hiking prices amid an ongoing supply shortage, with Micron Technology dropping about 4% and Sandisk tumbling 6%, though Sandisk shares have climbed more than sixfold since the start of the year.
Context
This selloff reflects broader market volatility and profit-taking after an extended rally in semiconductor and AI-related stocks. The transition from AI training to AI agents remains a focus for investor optimism, but near-term macro headwinds have triggered a correction.