Semiconductor stocks retreat sharply as doubts grow over sustainability of hyperscalers’ AI-related expenditures.
Semiconductor stocks have fallen 22% from their recent peak, reversing a 158% surge over the past year. The PHLX Semiconductor Sector index’s decline reflects investor concerns about the durability of AI-driven spending by hyperscalers.
During the same period, the S&P 500 rose 15.7%, underscoring the sector’s outsized volatility. Leading chipmakers, including high-growth AI-related stocks, have been hit hardest, though some analysts see potential buying opportunities amid expectations of continued AI demand.
Taiwan Semiconductor Manufacturing (TSM) remains a dominant player, controlling 73% of the contract chip fabrication market. Its technological lead over rivals like Samsung and Intel has widened, particularly in advanced AI chip production.