Aug. 19 at 12:05 AM
AI-related chip stocks pulled back sharply Tuesday after a strong recent rally, with investors taking profits amid elevated expectations, rising Treasury yields and concerns that upcoming AI-company financial updates may disappoint. The semiconductor sector was among the S&P 500’s biggest decliners, reflecting growing caution around AI valuations and the sustainability of massive infrastructure spending.
Optical and semiconductor names were hit particularly hard: Coherent fell 12.8%, Lumentum 9.9%, Ciena 8.9% and Sandisk 9%. Micron dropped 7%, while Marvell fell 7.8%, Intel 6.6%, AMD 4.3%, Broadcom 3.2% and Nvidia 2.3%.
Analysts cited several factors behind the selloff. Higher Treasury yields can pressure high-growth technology valuations by increasing the discount rate applied to future earnings. At the same time, investor expectations for AI-related companies and semiconductor demand have become extremely elevated following months of strong gains.
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