Chip stocks around the world sold off sharply on Tuesday, the latest chapter in the months long jitters surrounding artificial intelligence, memory and chip stocks.The sell off briefly pushed the Nasdaq-100 index into correction territory, which is a drop of 10% or more from its most recent record high.
The influential index tracks the top 100 non-financial companies traded on the Nasdaq exchange.Shares of several chip and memory giants, including Sandisk, Western Digital, Seagate, Micron, and AMD all fell around 10% in early trading.Dell Technologies, which produces servers that use chips and memory made by those firms, tumbled 13%.
Intel shares slid 7%.The selling kicked off overnight in Asia, with stocks traded on markets in Korea, Japan, and Taiwan.Both Samsung Electronics and SK Hynix, the primary manufacturers of memory used in AI data centers, plunged more than 15%.Kioxia, another computer storage maker, plummeted 18%.
The latest wave of investor unease followed a report on Monday that a Chinese state-backed firm was beginning mass production of domestic chip-making tools.However, the report did not name the company.
NBC News was not able to verify the report.Still, shares of established firms that make chip manufacturing equipment such as ASML, Canon and Nikon fell sharply on the news.Tuesday’s moves also come ahead of major earnings reports later in the week from Meta, Amazon, Microsoft and other companies that are spending hundreds of billions of dollars to build AI data centers.
Those results could prove pivotal to the trajectory of the market.Last week, Alphabet shares plunged 7% after the company reported its own results and increased its projected capital expenditures to as much as $205 billion.
Most of that will go to building and expanding data centers.Evercore technology analyst Mark Mahaney said last week that Alphabet would likely set the stage for Microsoft and Amazon to do the same when they report this week.“The Capex increase increas...