Item 1 of 3 Computer motherboard and chip appear in this illustration taken August 25, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
[1/3]Computer motherboard and chip appear in this illustration taken August 25, 2025. REUTERS/Dado Ruvic/Illustration/File Photo Purchase Licensing Rights, opens new tab
June 5 (Reuters) – U.S.-traded chipmakers plunged on Friday, losing about $1.3 trillion in market value, with deep losses in AI heavy hitters including Nvidia (NVDA.O), opens new tab, Micron Technology (MU.O), opens new tab and Advanced Micro Devices (AMD.O), opens new tab, as Broadcom’s (AVGO.O), opens new tab weak report earlier this week reverberated across Wall Street.
The PHLX chip index (.SOX), opens new tab slumped 10.3% in its deepest one-day loss since March 2020, when the coronavirus pandemic threw global markets into a tailspin.
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Friday’s selloff added to losses on Thursday after Broadcom issued a quarterly report that showed demand for its custom AI chips business falling short of lofty expectations.
The PHLX’s combined loss of 12% over two sessions shows investors are becoming more concerned about pricey, high-flying tech stocks just as Elon Musk prepares a blockbuster initial public offering next week for SpaceX at an exceedingly high $1.75 trillion valuation.
The chip index hit a record high on Wednesday, and even after Friday’s losses it remains up 73% year to date.
Nvidia, the world’s most valuable chipmaker, fell about 6%, cleaving more than $300 billion from its market capitalization.
Micron Technology tumbled 13%, evaporating about $150 billion in market value. Recent investor darling Marvell Technology (MRVL.O), opens new tab gave back 17%, while AMD lost almost 11%.
“You’ve had a lot of people here that were just blindly buying the dip,” said Dennis Dick, a proprietary trader at Triple D Trading. “Blindly buying the dip had been winning you money, but that ended today.”
Worries about higher interest rates also spooked investors across the U.S. stock market following stronger-than-expected jobs data, and the S&P 500 (.SPX), opens new tab fell 2.6%.
One of the biggest beneficiaries of the AI race, Broadcom, lost 7.9%, bringing its two-day loss to almost 20%.
“The semiconductor sector was way overbought. That’s why we’re seeing the sell-off. I don’t think it’s the end of the (semiconductor) bull market,” said Ohsung Kwon, Chief Equity Strategist at Wells Fargo.