What happened: Semiconductor stocks retreated on Friday. Memory and storage highfliers Micron Technology (MU) and Sandisk (SNDK) stocks dropped more than 2%, and Western Digital (WDC) fell more than 3%.
Chipmakers, including Nvidia (NVDA), AMD (AMD), Broadcom (AVGO), Intel (INTC), and Marvell (MRVL), also moved lower. Qualcomm (QCOM) retreated as well.
Among semiconductor equipment makers, Applied Materials (AMAT) and Lam Research (LRCX) each declined more than 4%.
Going into Friday’s trading session, global semiconductor stocks had shed $3.3 trillion in market value since June 22.
What’s behind the move: Semiconductor stocks have been volatile in recent weeks over concerns that investors will want to see a return on investment from big spenders on AI infrastructure.
Artificial intelligence costs have been rising. Taiwan Semiconductor Manufacturing Company (TSM) this week guided to higher-than-anticipated capital expenditures, in part due to higher tool prices.
Growing global competition in AI is also weighing on sentiment after Chinese startup Moonshot unveiled Kimi K3, believed to be the world’s largest publicly available AI model that developers can download and run themselves.
The launch highlights the rapid progress of China’s open AI ecosystem, coming a month after the US withdrew Anthropic’s (ANTH.PVT) Fable and Mythos models over security concerns.
Meanwhile, on Thursday, Bloomberg reported that Alphabet (GOOG, GOOGL) was behind schedule in delivering Gemini 3.5 Pro, its most powerful AI model.
What else you need to know: Semiconductor companies have been a key beneficiary of the artificial intelligence build-out.
Wall Street is still positive on the AI trade but will be looking toward earnings to drive the sector and overall market higher. Particularly, spending on AI will continue and is justified.
“What we definitely need to see continue, though, is hyperscalers’ capex,” Principal Asset Management chief global strategist Seema Shah told Yahoo Finance earlier this week.
“Their earnings need to be strong,” she added. “They are really the foundation for the entire AI ecosystem.”
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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