Wall Street semiconductors have remained on edge since last week, with the whiplash ceasing to stop. Futures tired to major chipmakers like Micron Technology Inc., Advanced Micro Devices Inc., Nvidia Corp. and Intel Corp. fell sharply after ending with gains on Monday.
In the run up to market open, Micron traded 5.5% lower at $931 and AMD slumped 4% to $530 after touching a record high on Monday on a target price hike by Goldman Sachs. Besides these, Jensen Huang's bellwether Nvidia traded 0.75% lower at $194.09, and Intel Corp shed 4.5% to trade at $116.68.
The chipstocks will likely drag down the tech-heavy Nasdaq index, as futures point to a gap down open. Nasdaq 100 was down nearly 1% to 29,665.25 during pre-market trade.
Futures tied to the S&P 500 index were down 0.13% to 7,582 while Dow Jones Industrial Average bucked the trend due to its low tech exposure and rose 0.3% to 53,492 during pre-market trade.
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"The whiplash pattern in AI-linked chip stocks over the past week, sharp Thursday drawdown, Monday recovery, and now indications of another gap-down open, is best read not as directional weakness but as the market repricing three tensions in real time and failing to settle on any of them," said Harshal Dasani, Business Head at INVAsset PMS.
He outlined the three factors including the heated AI capital expenditure compared to the valuation debate, supply-signal shift, and Fed's hawkish outlook.
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Before Monday's rallly, Thursday's declined came as reports indicated that Meta Platforms may rent out excess AI computing capacity, fuelling concerns that the rapid build-out of AI infrastructure could eventually create oversupply. The development had prompted investors to reassess rich valuations across semiconductor stocks.
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