Semiconductor stocks slide as chip sector grapples with AI uncertainty

Semiconductor stocks came under sustained pressure as a wave of selling swept through the sector on concerns about the durability of demand for AI-related chips. Leading memory chipmaker Micron, storage specialist SanDisk and processor manufacturer Intel all registered significant losses as investors reassessed their positions.

The pullback reflects growing caution among market participants about whether current levels of spending on artificial intelligence infrastructure can be sustained at existing pace. Questions have also resurfaced regarding competitive pressures from Chinese chipmakers, a factor that has periodically rattled investor sentiment in the sector.

The weakness in major semiconductor names has contributed to broader pressure on the Nasdaq composite index, which is heading for a weekly decline. The chip sector, which had benefited substantially from the AI investment boom over the past year, has become increasingly sensitive to shifts in sentiment around the trajectory of AI-related spending.

Analysts cautioned that the sector may face further volatility as investors weigh mixed signals on the sustainability of demand from data centers and other AI infrastructure projects. The performance of major chipmakers in coming quarters is expected to provide clearer indicators of underlying demand trends in this critical area.