It’s been a brutal stretch for semiconductor investors. Last week, a wave of selling swept through the artificial intelligence (AI) chip sector, erasing about $1.3 trillion of market value from chip stocks in Friday’s session alone. Nvidia (NVDA 3.39%) fell about 6% that day, and Advanced Micro Devices (AMD 4.63%) dropped almost 11%. Broadcom (AVGO 4.86%), whose earnings report earlier in the week helped set off the slide, has lost about a fifth of its value in a week.
And now these stocks are having another bad week so far, building on last week’s losses.
Sharp declines like these can be unnerving. But they can sometimes create opportunities for long-term investors — especially when the underlying businesses are still posting accelerating growth. And that seems to be the case here.
Image source: Getty Images.
1. Nvidia
Even after its pullback, Nvidia remains the most valuable company in the sector, with a market capitalization of about $4.9 trillion as of this writing. Shares of the AI chipmaker are down about 18% from their 52-week high.
Nvidia’s latest results, reported last month, arguably gave investors little to worry about. In the company’s fiscal first quarter of 2027 (the period ended April 26, 2026), revenue rose 85% year over year to $81.6 billion, driven by 92% growth in data center revenue. And management guided fiscal second-quarter revenue of about $91 billion, implying year-over-year growth of about 95% — an outlook that assumes no data center compute revenue from China.
Today’s Change
(-3.39%) $-7.05
Current Price
$201.14
Key Data Points
Market Cap
$4.9T
Day’s Range
$199.92 – $207.22
52wk Range
$140.85 – $236.54
Volume
13.1K
Avg Vol
165.8M
Gross Margin
74.15%
Dividend Yield
0.14%
“The buildout of AI factories — the largest infrastructure expansion in human history — is accelerating at extraordinary speed,” said Nvidia founder and CEO Jensen Huang in the company’s fiscal first-quarter earnings release.
Despite this momentum, the stock trades at a price-to-earnings ratio of about 31 as of this writing. For shares to recover, AI infrastructure spending may simply need to keep growing at similarly rapid rates — and Nvidia’s own guidance suggests it is.
2. Advanced Micro Devices
AMD shares closed at a record $542.52 on June 3 — hours before Broadcom’s report hit — and have since fallen to about $452 as of this writing, a decline of about 17%. Even so, the stock has more than doubled in 2026.
The chip designer’s momentum may help explain that enthusiasm. AMD’s first-quarter revenue rose 38% year over year to $10.3 billion, fueled by 57% growth in the data center segment — a business AMD chair and CEO Lisa Su called “the primary driver of our revenue and earnings growth” in the company’s first-quarter earnings release. Even better, management guided for second-quarter revenue of about $11.2 billion, representing year-over-year growth of about 46% — a meaningful acceleration.
Today’s Change
(-4.63%) $-22.04
Current Price
$453.47
Key Data Points
Market Cap
$738B
Day’s Range
$448.40 – $477.25
52wk Range
$115.06 – $546.44
Volume
4.9K
Avg Vol
37.3M
Gross Margin
47.09%
Later this year, AMD also plans to ship Helios, its first full rack-scale AI system, with OpenAI and Meta Platforms already lined up as customers.
However, even after the sell-off, the stock trades at more than 100 times its earnings over the past year. A valuation like this leaves little room for execution missteps.
3. Broadcom
But Broadcom stock has fallen particularly hard. And the slide interestingly followed a great quarter.
In its fiscal second quarter of 2026 (the period ended May 3, 2026), the custom chip specialist grew revenue 48% year over year to $22.2 billion. AI chip revenue jumped 143% to $10.8 billion, exceeding management’s forecast. Management also guided to about $16 billion in AI chip revenue in the fiscal third quarter and $56 billion for the full fiscal year, and reiterated its more than $100 billion AI chip revenue target for fiscal 2027.
Today’s Change
(-4.86%) $-19.04
Current Price
$373.12
Key Data Points
Market Cap
$1.8T
Day’s Range
$371.13 – $385.66
52wk Range
$244.17 – $495.00
Volume
3.9K
Avg Vol
25.3M
Gross Margin
65.66%
Dividend Yield
0.67%
Part of the market’s concern seems to center on profitability, as the company’s fastest-growing business changes the makeup of its sales. CEO Hock Tan addressed the issue directly.
“Semiconductor margins remain very stable and very solid. It’s the mix, particularly the mix between software and non-AI to the very, very rapidly growing AI semiconductor that is just diluting gross margin,” Tan said during the company’s fiscal second-quarter earnings call.
But there may also have been disappointment that the company only reiterated its more than $100 billion AI chip revenue target for fiscal 2027, rather than raising it.
Are these stocks buys after the sell-off?
Overall, this looks like a good entry point for these important AI chip companies.
But there are some significant risks to consider. Valuations across the group still assume years of strong growth, and AI infrastructure spending could decelerate. There’s also competition to consider.
Ultimately, the businesses themselves don’t seem to be the problem. Growth is accelerating at all three. So, I think investors with a long time horizon could find these beaten-down leaders worth a closer look. Given how quickly sentiment shifted this month, however, easing into a position rather than building it out all at once may make sense. After all, who’s to say that this is the bottom of these stocks’ pullbacks?
