tech
Qualcomm drops 11% as chip stocks pull back from record AI-driven rally
The recent rally has shown a broadening of the AI trade beyond chipmaking giant Nvidia.
TL;DR
- Chip stocks fell on Tuesday, ending a rally that had broadened the AI trade.
- Qualcomm dropped over 11%, Intel fell 7%, Skyworks Solutions declined more than 5%, and Marvell Technology lost about 4%.
- The iShares Semiconductor ETF decreased by 3%.
- Declines followed a higher-than-expected consumer inflation reading and rising oil prices, leading to a risk-off sentiment among investors.
- The AI trade had previously expanded beyond Nvidia, lifting chip stocks to new highs.
- Demand for CPUs and GPUs for large language models boosted chip stocks.
- Investors are anticipating increased demand for other AI components, including memory chips, amidst supply shortages.
- Micron Technology dropped about 4%, and Sandisk tumbled 6%.