The sell‑off in U.S. semiconductor equities that began on Wednesday extended into Thursday’s pre‑market session, driven by concerns over lofty valuations and heavy AI‑related spending by technology firms. An index tracking semiconductor stocks finished 6.3% lower, making chipmakers one of the biggest drags on both the S&P 500 and Nasdaq. By 04:42 ET, Micron Technology and Western Digital each slipped about 2.1%, while Coherent and Marvell Technology fell roughly 2% and 1.8% respectively. Larger names such as Intel, AMD, and Microchip Technology also edged down about 1%.
On Wednesday, Micron plunged as much as 10.6%, and Applied Materials, Lam Research, Allegro MicroSystems and Intel each dropped more than 9%, underscoring the breadth of the decline across the sector. JPMorgan analyst Nikolaos Panigirtzoglou warned that the strong and almost steady outperformance of semiconductor stocks—particularly AI chip and memory makers—relative to hyperscalers since last September appears “somewhat unsustainable in the long run.”
In contrast, Meta Platforms was an outlier, with its shares rallying 8.8% after Bloomberg reported that the company is debating a cloud‑business model to monetize excess AI computing capacity. According to Bloomberg, Meta is considering whether to offer access to AI models hosted on its infrastructure or to sell raw computing power. The move follows Meta’s April disclosure that it could spend up to $145 billion on capital expenditures this year to expand data‑center capacity and secure the GPUs needed for AI model training and large‑scale workloads. By standing up a cloud offering, Meta could generate revenue on otherwise idle capacity, a development welcomed by investors uneasy about its massive spending plans, and it would place the firm in competition with Amazon, Microsoft, Google and CoreWeave.
The heightened volatility arrives ahead of the key monthly U.S. jobs report scheduled for Thursday, with markets set to close on Friday in observance of the Fourth of July holiday.