Nvidia, Broadcom and AMD lead $1.3 Trillion chip sector decline
Synopsis
A sharp global chip selloff wiped out approximately $1.3 trillion in semiconductor market value over two trading sessions. The decline followed Broadcom's earnings update and concerns about the pace of AI-related demand growth. Nvidia, AMD, Micron Technology and other major chipmakers posted steep losses, while broader markets also weakened. The selloff raised fresh questions about valuations across one of the market's strongest-performing sectors.
The semiconductor sector went into sharp reverse yesterday as around $1.3 trillion wiped from chipmakers market value over two trading sessions as traders took stock of artificial intelligence-driven prospects and growing likelihood of higher US rates remaining elevated for longer.
The rout spread across major chip companies after chip designer Broadcom's earnings and forecast disappointed and soon engulfed most other names central to the technology boom over the past year.
Nvidia's shares have slid around 6% during yesterday's session, eradicating over $300bn market cap, Micron Technology declined 13%, while AMD fell close to 11% and Marvell Technology down 17% with Broadcom dropping about 20% over the past two days.
Semiconductor Sector Faces Valuation Reset
The Philadelphia Semiconductor Index (SOX), the barometer of the US chip stocks, slid 10.3% yesterday, its largest daily fall since March 2020.
The SOX is down about 12% over two days but is still up 73% in 2026, reflecting how investor fervour for AI-driven infrastructure, high-performance computing processors and expanding data centers had become central to the rally over the past year.
"The stock has fallen so much on its own earnings and outlook report but it shows there's less certainty in earnings projections now. I think investors are recalibrating how sustainable the rapid growth is going to be and looking closely at interest rate prospects in the US" noted a trading manager on Wall Street.
Industry expectations have still projected long-term growth with Gartner forecasting semiconductor revenue to pass $700bn in 2026 with continued expenditure growth on AI systems, cloud computing, and high-performance computing (HPC) infrastructure.
Global Markets Feel The Impact.
Not only the US markets experienced declines. Technology stocks in both Asia and Europe experienced a fall as the sell-off hit its main players and the sell-off is felt in Taiwan, home of the world's largest contract chipmaking industry, as well as South Korea, a major supplier of memory chips, due to the central role these countries play in the semiconductor supply chain.
Broader equity markets came under fire as well. The Nasdaq lost 4.18%, its largest daily decline since April 2025 while the S&P 500 closed 2.64% lower.
For US and Australian investors, the sector's rout shows the increasingly integral role of chip companies to overall market performance as corporations' growing investment in AI technologies, cloud infrastructure and digital services makes chip stocks vital to equity portfolios around the globe.
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Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
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