Chip slump erases $1.3tn in stock market value

U.S.-traded chipmakers plunged on Friday, losing about $1.3 trillion in market value, with deep losses in AI heavy ​hitters including Nvidia, Micron Technology, and Advanced Micro Devices, as Broadcom's ‌weak report earlier this week reverberated across Wall Street.
The PHLX chip index slumped 10.3% in its deepest one-day loss since March 2020, when the coronavirus pandemic threw global markets ​into a tailspin.
Friday's selloff added to losses on Thursday after Broadcom issued ​a quarterly report that showed demand for its custom AI ⁠chips business falling short of lofty expectations.
The PHLX's combined loss of 12% over two ​sessions shows investors are becoming more concerned about pricey, high-flying tech stocks just ​as Elon Musk prepares a blockbuster initial public offering next week for SpaceX at an exceedingly high $1.75 trillion valuation.
The chip index hit a record high on Wednesday, and even after Friday's ​losses it remains up 73% year to date.
Nvidia, the world's most valuable ​chipmaker, fell about 6%, cleaving more than $300 billion from its market capitalisation.
Micron Technology tumbled 13%, ‌evaporating about $150 ⁠billion in market value. Recent investor darling Marvell Technology gave back 17%, while AMD lost almost 11%.
"You've had a lot of people here that were just blindly buying the dip," said Dennis Dick, a proprietary trader at Triple ​D Trading. "Blindly buying the ​dip had been ⁠winning you money, but that ended today."
Worries about higher interest rates also spooked investors across the U.S. stock market ​following stronger-than-expected jobs data, and the S&P 500 fell 2.6%.
One ​of the ⁠biggest beneficiaries of the AI race, Broadcom, lost 7.9%, bringing its two-day loss to almost 20%.
"The semiconductor sector was way overbought. That's why we're seeing the sell-off. ⁠I ​don't think it's the end of the (semiconductor) bull ​market," said Ohsung Kwon, Chief Equity Strategist at Wells Fargo.

-Reuters