The AI Rally Stumbled and Took Global Chip Stocks Down With It
AI stocks spent months defying gravity... then Newton’s laws prevailed. The sector plunged across Wall Street, Seoul, and Frankfurt last week after Broadcom posted “strong results” but disappointing guidance — crystallizing concerns that AI stocks had run too hot. That gap spooked semiconductor investors, and by the time markets opened, chips were down on three continents.
- Korea’s Kospi bore the brunt as Samsung and SK Hynix fell sharply — joined by Tokyo Electron amid a sell-off that swept across Asia.
- European chip stocks absorbed the aftershock, with ASML and Infineon declining steeply — pulling the Stoxx 600 technology index lower on the session.
Reset, not retreat: The US damage extended beyond chips. The S&P 500 tracked toward its first weekly loss in ten weeks, with the Nasdaq leading declines and investors rotating into defensive sectors. A stronger-than-expected jobs report compounded the pressure, pushing rate hike expectations firmly into year-end. Strategists at Ortus Advisors pushed back on the bearish view, framing the sell-off as a long-overdue correction after months of AI-driven gains. The session proved a timely reminder that despite whatever r/WallStreetBets tells you, stocks don’t always go up.
