"Revising Expectations": Chipmakers Are Close to Losing $1 Trillion in Total Market Capitalization

The total market capitalization of chip and processor manufacturers in the Philadelphia Semiconductor Index has fallen to nearly $1 trillion and could exceed that mark, according to Bloomberg. Investors are increasingly concerned about rising interest rates, high stock valuations, and the enormous costs of building infrastructure for artificial intelligence.

The Philadelphia Semiconductor Index was down 4.5% at one point during trading on Wednesday, October 14. Over the past six trading sessions, it has lost about 10% and is heading toward its longest losing streak since May 2025, Bloomberg noted. More than half of the stocks in the index have fallen by at least 10% during this period. For example, Arm Holdings shares have plummeted nearly 20%, Applied Materials shares by about 15%, and Intel shares by 11%. GlobalFoundries was the only company in the index whose shares remained in positive territory, outperforming the rest of the sector during this period, according to Bloomberg.

Also on October 14, the Roundhill Memory ETF, which holds exposure to the stocks of memory manufacturers such as Micron, SanDisk, SK Hynix, Samsung Electronics, and others, fell 5%.

The global investment trend toward AI—driven primarily by semiconductor stocks—has come under heavy pressure over the past week, according to Bloomberg.

“In recent days, pressure on the stocks of global chipmakers has intensified significantly,” Bloomberg quotes Ulrike Hoffmann-Burchardi, Chief Investment Officer for the Americas and Global Head of Equities at UBS Global Wealth Management, as saying. “Increased competition in the AI sector, growing financing needs, and higher interest rates may occasionally heighten volatility; however, we view the current sell-off as a correction in expectations rather than a fundamental shift in the investment narrative surrounding AI.”.

Another negative factor was the remarks made by Broadcom CEO Hock Tan: he compared some investors trying to profit from the AI boom to casino gamblers and warned that the sector could face funding constraints.

September U.S. inflation data, which came in higher than market forecasts, also triggered a new wave of pressure. The data reinforced expectations of further rate hikes by the Fed.

According to Bloomberg, a major event for the market will be the presentation by AI startup Anthropic to a select group of investors, scheduled for October 14 in San Francisco. Wall Street will be looking for signs of the company’s current annualized revenue growth to better gauge the market’s willingness to continue increasing spending on AI.

“We recommend that investors focus on those areas where AI spending is already translating into sustainable profit growth and where the technology is becoming more widely adopted among corporate clients and consumers,” noted Hoffmann-Burchardi.

This article was AI-translated and verified by a human editor