Chip Stocks Extend Pullback Amid AI Bubble Fears

Broadcom and Intel shares fell sharply amid mounting concerns over the sustainability of AI-related spending, pulling the Nasdaq lower and extending a pullback in chipmaker stocks. The selloff reflects growing investor unease about whether elevated capital expenditures on artificial intelligence infrastructure can continue at current levels.

The decline in semiconductor stocks pressured the broader tech-heavy Nasdaq index, underscoring the market's heavy reliance on AI momentum. Broadcom, which has benefited from demand for AI networking and custom chips, and Intel, struggling to regain competitiveness in advanced chip manufacturing, both saw notable losses as traders reassessed the AI growth narrative.

The rotation out of chip stocks comes as Wall Street debates whether hyperscale cloud providers and enterprise customers will maintain aggressive AI buildouts or slow spending in response to economic uncertainty and still-uncertain returns on AI investments. Semiconductor names have been among the biggest beneficiaries of the AI boom since early 2023, making them particularly vulnerable to any shift in sentiment around the sector's growth trajectory.