A global selloff in chip stocks dragged markets down Thursday, as record earnings from TSMC, the world’s largest chipmaker, failed to quell doubts over the sustainability of AI spending.
TSMC’s stock fell after the company announced a fresh $100 billion investment for US chip fabs, signaling strong demand, but further unnerving investors concerned about “stretched valuations and ever-high expectations,” The Wall Street Journal wrote. “That tells you the AI trade isn’t being priced on growth anymore. It’s being priced on perfection,” an investment executive noted.
Chip stocks have shown “meaningful cracks” in recent weeks, an analyst told Bloomberg, and “will raise some real warning flags” without a strong rebound soon.
