$1.3 trillion wiped off Wall Street as AI rally slows; Nvidia slips 6%, Micron falls 13%
US tech and semiconductor stocks fell sharply on Friday as investors cooled on AI-driven valuations and digested stronger US jobs data. The PHLX Semiconductor Index dropped 10.3% (steepest since March 2020), extending a two-day slide that erased about 12% and ~$1.3 trillion in chipmakers’ value. Nvidia fell ~6%, Micron 13%, Marvell 17%, AMD ~11%, and Broadcom 7.9%. The Nasdaq fell 1.4% and S&P 500 0.7%.
Near-term risk-off in AI semis; NVDA likely trades with index/PHLX beta and valuation de-risking.
Nvidia shares fell about 6% as the AI-led semiconductor sell-off accelerated and market value was cut by over $300B.
Bias to downside/volatility until rate/AI-valuation fears cool.
Background
The sell-off followed stronger-than-expected May jobs data and a prior day drop after Broadcom’s quarterly results missed elevated expectations for its custom AI chip business.
Why it matters
Semiconductor equities sold off sharply as investors cooled AI-fuelled valuations; the move appears driven by macro rates/yields and a company-specific AI-chip earnings disappointment at Broadcom.
Market relevance
Traders should treat this as a sector-wide de-risking event with Broadcom as the key read-across catalyst, amplified by higher-rate sensitivity from jobs data.
Market effects
PHLX Semiconductor Index -10.3% signals broad AI-semi valuation compression; likely increases correlation/volatility across chip names.
Asia tech weakness followed (e.g., SK Hynix -9.9%, Samsung -6.4%), suggesting global read-across from US semis.
Iran-war/oil-price uncertainty plus higher-for-longer rate fears can keep discount rates elevated, weighing on long-duration AI equities.
Alternative perspectives
The article notes the semiconductor gauge is still up 73% YTD, implying the sell-off could be a positioning reset rather than a full trend break.
If jobs data lifts yields, the pressure may persist; however, the piece also cites continued resilience in employment despite AI hiring concerns, which could stabilize growth expectations.
Key entities
- indexPHLX Semiconductor Index
Plunged 10.3% on Friday, steepest single-day fall since March 2020.
- companyBroadcom
Quarterly earnings failed to meet elevated expectations for its custom AI chip business; shares fell 7.9% Friday.
- macroUS jobs data (May)
Employers added 172,000 jobs, about double economists’ expectations, raising concerns about fewer rate cuts.
