Chip stocks reversed Monday's rally on Tuesday, with Micron Technology, Coherent and other semiconductor names posting sharp declines. The Philadelphia Semiconductor Index dropped more than 5% as analysts pointed to elevated Treasury yields, profit-taking and a lukewarm reaction to a report on Anthropic's revenue.
Chip stocks tumbled Tuesday in a broad reversal from Monday's gains across the stock market, leaving investors with whiplash. The Philadelphia Semiconductor Index, known as SOX, fell more than 5% in afternoon trades. A day earlier, the index had risen 1.6%.
Memory and AI names lead the decline
Micron Technology stock retreated more than 7% to 939.18. Sandisk sank 9% to 1,623.44, and SK Hynix fell more than 8% to 156.90. Nvidia slid more than 2% to 219.53.
AMD dropped more than 5% to 477.98. Broadcom slipped nearly 3% to 380.81. The steepest losses on the index hit networking-chip makers Coherent and Credo Technology: Coherent crashed more than 12% to 308.89. Credo plunged nearly 13% to 246.71. MarketWatch separately reported that optical-component makers Ciena and Lumentum Holdings each fell more than 9%.
Analysts point to yields and AI valuation jitters
Jefferies analyst Jeffrey Favuzza said the declines followed pressure on Asia-listed tech stocks and could relate to concerns about high Treasury yields. He added that AI startup Anthropic's annual revenue run rate has reached more than $65 billion ahead of its expected IPO, per a Bloomberg report, a figure he called impressive but slightly below recent estimates.
Mizuho Securities trading-desk analyst Jordan Klein instead attributed the moves to machine trading, with volumes running low in mid-August. David Wagner, head of equity at Aptus Capital Advisors, said the pullback could signal investors locking in gains after a recent rally in AI hardware shares.
Fundamentals versus stretched expectations
Freedom Capital Markets analyst Paul Meeks said memory companies have strong underlying fundamentals, but according to MarketWatch, bearish investors "are looking for the 'inevitable' collapse in commodity chip pricing."
ActivTrades analyst Ion Jauregui said demand for memory and storage products is rising rapidly, and that he remains bullish on the structural AI trade. Still, he said he would stay cautious about short-term risks if expectations keep climbing.
Sources: Investor's Business Daily, MarketWatch
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