Chip selloff erases over $1 trillion in stock market value

The U.S. stock market experienced a significant downturn on Friday, with chipmakers bearing the brunt of a selloff that erased over $1 trillion in market value. The PHLX semiconductor index plummeted nearly 8.5 percent in afternoon trading, marking its steepest one-day decline since April 2025. This sharp drop followed a weak quarterly report from Broadcom earlier in the week, which indicated that demand for its custom AI chips fell short of expectations. The selloff has intensified concerns among investors about the high valuations of technology stocks, particularly those in the artificial intelligence sector. Nvidia, the world's largest chipmaker, saw its market capitalization shrink by over $300 billion as its stock fell about 6 percent. Micron Technology tumbled 11 percent, losing $127 billion in value, while Marvell Technology and AMD also experienced significant declines of 12 percent and 10.5 percent, respectively. Proprietary trader Dennis Dick noted that the era of "blindly buying the dip" had ended, as investors who had profited from this strategy were hit hard. The broader stock market also felt the pressure, with the S&P 500 down 2.3 percent, partly due to stronger-than-expected jobs data that fueled worries about higher interest rates. Broadcom, a key player in the AI race, was down 7.5 percent, extending its two-day loss to 19 percent.

“

You've had a lot of people here that were just blindly buying the dip. Blindly buying the dip had been winning you money, but that ended today.