Semiconductor stocks set to lose over $1 trillion as AI spending fears mount

Stocks in the Philadelphia Semiconductor Index were on course to lose more than $1 trillion in market value after a six-session decline of about 10%, Bloomberg reported on October 14. The index fell 3.1% in Wednesday trading, putting it on track for its longest losing streak since May 2025. Higher interest-rate expectations, elevated valuations and the financing demands of AI infrastructure weighed on the sector. More than half of the index’s members had fallen at least 10% over the six sessions. Arm dropped almost 20%, Applied Materials about 15% and Intel 11%. GlobalFoundries was the only constituent to gain during that period. UBS Chief Investment Office’s Ulrike Hoffmann-Burchardi attributed the pressure to factors including AI competition, financing needs and interest rates. She described the decline as a reassessment of expectations rather than a fundamental breakdown in the AI investment outlook. Broadcom CEO Hock Tan had warned earlier in the week about potential funding constraints and compared some investors pursuing the AI boom to gamblers, Bloomberg reported. Hotter-than-expected September inflation reinforced expectations for further Federal Reserve rate increases. Inv...