Nvidia, AMD, and Micron experienced significant declines in premarket trading on Thursday as the global sell-off of AI stocks intensified. This downturn has erased over $1 trillion from the market capitalization of leading AI and semiconductor companies this week. Nvidia saw a 1.8% drop, Micron fell by 4.4%, and AMD decreased by 3.5%.
Other companies in the AI sector also faced declines. Neoclouds saw its CoreWeave shares fall by 5.3%, while Nebius dropped 4%. Oracle was trading 2% lower. In total, 20 of the most valuable global AI and semiconductor stocks have lost over $1 trillion in value this week. The sell-off has been driven by concerns over interest rate hikes, AI financing challenges, and increasing competition.
The impact of this sell-off was felt across Asia and Europe as well. In South Korea, chip giant SK Hynix plunged more than 10%, and Samsung Electronics fell 8.73%. Other South Korean chip-related stocks were also affected, with LG Innotek sinking 8.95%, Seoul Semiconductor shedding 9.28%, and Samsung SDI declining 6.26%.
In Japan, SoftBank Group, a major technology investment firm, tumbled 7.9%. Semiconductor testing equipment maker Advantest plunged almost 14%, while chipmaking equipment supplier Tokyo Electron lost 6.45%. Renesas Electronics saw an 8% decline. Taiwan's TSMC, the world's largest contract chipmaker, fell 1.81%.
European markets were not spared either. Dutch semiconductor giant ASML was down 6.6%, Infineon Technologies shed 9.4%, ASM International dropped 9.6%, and Nokia fell 5%. Investors are increasingly worried that higher borrowing costs could hinder the substantial capital spending needed to develop AI infrastructure, putting pressure on technology companies that have thrived on the AI investment surge.
Concerns about a potential oversupply of global memory chips by 2029 are also affecting market sentiment. Manufacturers are ramping up production capacity to meet the growing demand from artificial intelligence. Over the weekend, China's ChangXin Memory Technologies (CXMT) announced a breakthrough in a new architecture that could increase memory density by packing more data into a smaller space, signaling heightened competition in the memory sector.
On Monday, the chief executives of Broadcom and Intel warned that financing could become a significant obstacle to the AI boom. Broadcom's Hock Tan stated that financing could pose a bigger challenge to AI expansion than shortages of chips or electricity.
The sell-off followed a difficult session on Wall Street on Wednesday, where technology shares led broader market losses after hotter-than-expected U. S. inflation data fueled concerns that the Federal Reserve might raise interest rates further. The tech-heavy Nasdaq Composite dropped 1.88% to close at 26,692.87, while the S&P 500 shed 1.11% to end at 7,718.94. The Dow Jones Industrial Average slipped 0.09%.
Dan Ives, a tech analyst at Yorkville Ives, commented that the latest sell-off in AI-related stocks reflects growing concerns over the cost of financing massive infrastructure projects as U. S. Treasury yields climb above 5%. However, he emphasized that the underlying demand for AI computing power remains strong. Despite the current downturn, Ives sees the latest pullback as a buying opportunity, suggesting that the AI infrastructure boom is still in its early stages. He indicated that a change in demand, rather than interest rates, would alter his perspective, pointing to potential cuts in hyperscaler capital expenditure plans, canceled contracts, or falling GPU rental prices as warning signs.
