U.S. stocks opened mixed on Thursday, with the Dow Jones Industrial Average gaining 0.97%, as traditional blue chips attracted some buying interest. However, the tech-heavy Nasdaq Composite fell 1.10%, and the S&P 500 slipped 0.37%, with technology stocks facing significant pressure.
Broadcom's Disappointing Results Spark AI Chip Sell-off
The sharp downturn in chip stocks was triggered by Broadcom's lackluster quarterly earnings report, which fell short of Wall Street expectations and raised concerns about the near-term demand for AI chips. As a major supplier of data center networking chips and custom ASICs, Broadcom is often seen as a bellwether for cloud computing and AI infrastructure spending. Following the earnings miss, traders aggressively offloaded semiconductor positions, sending Broadcom shares tumbling 13.9% at the open, making it the biggest drag on the sector that day.
Selling pressure quickly spread to other AI-related chipmakers. Micron Technology dropped 6.61%, Advanced Micro Devices (AMD) shed 5.24%, and ARM Holdings PLC Sponsored ADR slid 7.7%. These hard-hit names are all key providers of hardware used in AI training and inference.
Major Chip Giants Also Retreat as Pessimism Spreads
Although NVIDIA and TSMC saw relatively moderate losses, they were not immune to the sell-off. NVIDIA edged down 0.6%, while TSMC fell 1.9%. Lithography leader ASML lost 2.92%, and Intel Corporation dropped 4.13%, indicating that bearish sentiment had rippled across the entire semiconductor supply chain.
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