Shares of semiconductor stocks such as Micron, SK Hynix, SanDisk Corp., Advanced Micro Devices (AMD) and Nvidia fell over 7% at the opening bell due to a wide selloff, amid increasing investor concerns of oversupply of chips, anticipated to take place in 2029, along with scrutiny around escalating borrowing costs of AI companies.
Micron commenced trade at a downturn of 4.57% to $872.34 apiece, while SK Hynix saw a decline of 4.04% to $141.59 after markets opened. AMD was at a downturn of 4.44% to trade at $545.47, minutes into trade, while SanDisk traded 7.27% lower to $1,301.33. Nvidia started the trading session at a downturn of 2.63% to $215.49. Intel traded lower at a downturn of 4.87% to $93.34 after the opening bell.
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Wall Street traded on a mixed note on Thursday, as concerns over heavy artificial intelligence spending and a hotter-than-expected inflation reading weighed on technology stocks. The Dow Jones Industrial Average advanced, supported by gains in non-tech shares, while the S&P 500 and Nasdaq Composite remained under pressure.
At 9:32 a.m. EDT, the Dow Jones Industrial Average was up 301.41 points, or 0.58%, at 51,922.89. The S&P 500 fell 36.01 points, or 0.47%, to 7,682.93, while the Nasdaq Composite dropped 316.005 points, or 1.18%, to 26,376.863.
The divergence reflected growing investor caution around the returns from artificial intelligence investments, particularly as companies continue to spend heavily on computing infrastructure and chip capacity.
Technology stocks came under renewed selling pressure after investors grew increasingly concerned about the scale of borrowing required to finance AI infrastructure expansion.
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Other factors affecting the decline in semiconductor share price include investor caution with regards to the cyclical peak in memory pricing. Prominent names in the investing space such as Ray Dalio predicted that the AI industry is nearing a "classic bubble" which is close to bursting. This is due to climbing interest rates and the need for liquidity.
Dalio noted that a large amount of debt was being taken out to fund AI endeavoursat the Forbes Global CEO Conference in Singapore on Wednesday.
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