Key facts
- AI chip stocks tumbled on Thursday, with Broadcom leading the losses.
- Broadcom missed revenue targets for the second quarter.
- The iShares Semiconductor ETF dropped nearly 4% on Thursday.
- Micron Technology, AMD, and Qualcomm also experienced significant stock declines.
- CrowdStrike shares fell 10% despite beating earnings and raising its annual revenue target.
- Blue-chip stocks, including the Dow Jones Industrial Average, rose on optimism for a US-Iran peace deal.
The market's enthusiasm for AI-related chip stocks faltered on Thursday, with significant declines seen across the sector. Broadcom, a key AI chip supplier and Nvidia partner, led the downturn, dropping as much as 15% after missing its second-quarter revenue expectations. This disappointment triggered a wave of selling in related hardware companies, causing the iShares Semiconductor ETF to fall nearly 4%. Other prominent chipmakers, including Micron Technology, AMD, Qualcomm, Intel, Marvell, and Nvidia, also experienced notable losses, ranging from 1% to 7%. Cybersecurity firm CrowdStrike also saw its shares tumble 10%, despite beating earnings and raising its annual revenue forecast, as results were not as strong as some investors anticipated. This sell-off in tech contrasted with a rise in blue-chip stocks, with the Dow Jones Industrial Average gaining 1.40%, driven by optimism surrounding a potential ceasefire agreement between Israel and Lebanon, which could reopen the Strait of Hormuz.