WS #16944
The AI trade is unwinding rapidly as investors reassess the sustainability of massive capex spending. AMD dropped 13%, Micron fell 12%, and Nvidia slipped below $200, dragging the SMH ETF down 7%. The selloff extends to infrastructure plays like Vertiv and Coherent, which sank on weak guidance. This broad-based rout signals a fundamental shift in sentiment, moving from 'buy the dip' to 'sell the rip' as earnings fail to justify premium valuations. Earnings season is proving toxic for growth stocks, with Qualcomm sliding 9% despite beating estimates due to weak forward guidance. Nintendo's Switch 2 sales are slumping, missing profit expectations, while SolarEdge faces weak demand clouds. These misses are reinforcing the narrative that consumer demand is weakening and that AI infrastructure spending may be peaking. The market is punishing companies that cannot deliver on high expectations, leading to a broad repricing of growth assets.
AI Selloff and Semiconductor Rout
The AI trade is unwinding rapidly as investors reassess the sustainability of massive capex spending. AMD dropped 13%, Micron fell 12%, and Nvidia slipped below $200, dragging the SMH ETF down 7%. The selloff extends to infrastructure plays like Vertiv and Coherent, which sank on weak guidance. This broad-based rout signals a fundamental shift in sentiment, moving from 'buy the dip' to 'sell the rip' as earnings fail to justify premium valuations.
Earnings season is proving toxic for growth stocks, with Qualcomm sliding 9% despite beating estimates due to weak forward guidance. Nintendo's Switch 2 sales are slumping, missing profit expectations, while SolarEdge faces weak demand clouds. These misses are reinforcing the narrative that consumer demand is weakening and that AI infrastructure spending may be peaking. The market is punishing companies that cannot deliver on high expectations, leading to a broad repricing of growth assets.