The semiconductor sector has officially entered a bear market, driven by intensifying skepticism over the sustainability of artificial intelligence capital expenditure.
The selloff, which had been building across optical interconnect and memory chip names, gathered decisive momentum as investors questioned the return on investment for the ongoing AI hardware spending spree.
5% in the session. Geopolitical tensions further weighed on sentiment, as renewed military exchanges between the US and Iran sent oil prices higher.
A catalyst for the latest leg down was a surprise technological breakthrough announced by Chinese AI startup Moonshot.
The development jolted the sector, reinforcing fears that competition is intensifying and that the moat for established US chipmakers may be narrowing.
This specific trigger compounded broader equity losses, with the Nasdaq 100 shedding 1.5% in the session.
Geopolitical tensions further weighed on sentiment, as renewed military exchanges between the US and Iran sent oil prices higher.