GoKawiilThe world's most valuable chip stocks have seen more than $1 trillion wiped from their market caps this week as investor jitters swept through the sector.
The selloff was led by Nvidia , which saw a $238 billion rout since market close on Friday. SK Hynix, Samsung Electronics and Micron — all key players in the memory space — lost $176 billion, $173 billion and $113 billion, respectively.
The chip sector has been one of the main beneficiaries of the AI boom, with investors piling into stocks as they looked to capitalize on the huge sums being funnelled into the sector.
The Philadelphia semiconductor index (SOX) — which tracks the 30 largest U.S.-traded companies involved in the chip sector — has risen 92% over the past 12 months, despite a nearly 20% drop over the past month.
In total, 20 of the world's most valuable chip stocks lost $1.3 trillion since market close on Friday, according to a CNBC analysis using FactSet data.
AMD also shed around $110 billion and Taiwan Semiconductor Manufacturing Co. lost $119 billion.
"This decline appears to be driven largely by sentiment rather than fundamentals," said Michael Field, chief equity strategist at Morningstar.
"Simply put, it's loss of confidence," he added. "We continue to see upside in many AI names, but these are growth stocks, and, as such, much of their value comes from cash flows expected far out into the future, which requires a lot of faith from investors."
The sharp sell-off reflects concerns that AI infrastructure spending may be "peaking faster than expected," said Charlie Dai, VP principal analyst at Forrester. Alphabet said it would boost its 2026 capex forecast as it rushes to build new AI infrastructure.
"Investors are reassessing whether near-term revenues can justify unprecedented AI spending levels, while some also worry about growing competition in chips and AI infrastructure," said Dai.
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