Chip stocks are on their longest losing streak in almost a year and a half, as investors grow less patient with heavy AI spending. Anthropic's investor day, reportedly set for Wednesday, adds to the tension.
Chip stocks haven't suffered a losing streak like this in almost a year and a half. The question for investors is what can pull the semiconductor sector out of its slump.
Sixth straight losing session for the sector
The iShares Semiconductor ETF, a proxy for chip stocks, closed lower on Tuesday for the sixth consecutive trading day, its longest losing streak since May 23, 2025, according to Dow Jones Market Data. Meanwhile, 22 of the 30 stocks in the PHLX Semiconductor Index were off more than 20% from their record highs, nearly all of which came in May or June.
SK Hynix, which is not in that index, closed lower for the seventh consecutive trading day, losing 19.5% over that period. Applied Materials was the worst performing stock in the S&P 500 on Tuesday, falling for the sixth session in a row after its investor event failed to excite Wall Street.
Anthropic's investor day and funding worries
Jefferies analyst Jeffrey Favuzza wrote in a Tuesday trading note that one of the biggest questions he gets from clients is why AI is weak across the board. He pointed to several factors, including recent commentary from Broadcom CEO Hock Tan that capital could be the biggest bottleneck in the AI buildout. Perhaps the bigger issue, according to Favuzza, is the anticipation and uncertainty around Anthropic's investor day.
Most investors, he wrote, want to see upward of $80 billion in annual recurring revenue from Anthropic.
Mizuho's Daniel O'Regan, managing director for equity trading, wrote that AI capital spending has outpaced free-cash-flow generation, so companies have tapped external financing for hardware purchases. If that financing gets tougher to come by, it could dent spending on chips and other AI infrastructure. According to O'Regan: "becoming less willing to fund AI-related spending at any price."
Source: MarketWatch
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