Nasdaq 100 Drops on Chip Stock Selloff
The Nasdaq 100 briefly fell into correction territory today. This happened after five straight days of declines.
The index closed down about 2%. It was more than 10% below its June peak.
Chip and semiconductor stocks sold off sharply around the world. The Philadelphia Semiconductor Index sank 6.2%.
Several chip and memory stocks fell around 10%. Dell dropped 13% and Intel dropped 7%.
Sandisk, Western Digital, Seagate, Micron and AMD also declined sharply. Investors are questioning how much money Big Tech spends on artificial intelligence.
This is driving the drop in semiconductor and memory stocks. The selloff is part of months-long worries over AI spending.
These worries have weighed on chip and memory stocks for months. This correction took only 38 trading days to develop.
The previous correction took more than 100 trading days after an October 2025 high. Financial company JPMorgan estimates AI-related spending could reach about $870 billion by the end of 2026.
That would mark a 77% increase from last year. Companies including Amazon, Meta, Microsoft and Alphabet are expected to account for about $750 billion of that total.
Key Terms 4
- correction A stock market drop of 10% or more from a recent high.
- Nasdaq 100 A stock market index tracking 100 large technology companies.
- semiconductor A material used to make computer chips.
- hyperscalers Huge tech companies that run massive computing and cloud systems.