US chip stocks hammered as AI spending fears trigger sell-off

U.S. semiconductor stocks faced a severe sell-off, marking a "black Monday" for the sector as investors grew anxious about the substantial capital expenditures required for artificial intelligence development. The downturn saw Advanced Micro Devices (AMD) plummet by 8% during intraday trading.

Other major players in the chip industry were also hit hard. Teradyne, a supplier of semiconductor testing and robotic technology, experienced a drop of over 7%. Memory manufacturer Micron Technology also suffered a significant decline, reflecting the broad market sentiment against chipmakers perceived to be heavily invested in the AI boom.

The sell-off suggests a growing investor concern that the immense costs associated with advancing AI technologies may outweigh the potential profits in the short to medium term. This sentiment has led to a widespread divestment from chip stocks, impacting even industry leaders.