Sharp selloff in chip stocks
US chip giants shed a combined $1.64 trillion in market value over the last six trading days. According to the source, three factors are behind the drop: the rising cost of AI investments, expectations of interest rate hikes and growing competition with China.
Why it matters
Chipmakers had been the biggest winners of the AI boom. The market's repricing of these companies is deepening questions about how data center and hardware investments will be financed.
What to watch
Rate expectations and China-related competition will shape the direction of chip stocks in the near term. Investors are watching for signals on the returns from AI spending.
