Shares of Micron Technology and SanDisk led a sharp decline in technology stocks on Tuesday, marking a significant stress test for the artificial intelligence trade that has powered market gains for months.
The selloff signals growing caution among investors who have heavily favored semiconductor names amid the AI infrastructure build-out.
Wall Street’s semiconductor sector faced a severe repricing, with a key index of chip manufacturers plunging 7% in the session.
Wall Street’s semiconductor sector faced a severe repricing, with a key index of chip manufacturers plunging 7% in the session.
The decline marks a sharp reversal for an industry that had more than doubled its value in recent months, driven by expectations of sustained demand for memory and processing power.
Despite the broad-based selling pressure, supply shortages in the memory chip market are expected to limit further losses.
Structural tightness in supply provides a floor for pricing power, even as sentiment cools on valuation concerns.