The AI Trade Just Had Its Worst Stretch in Months. Here Are 3 Reasons the Sell-Off Could Be a Buying Opportunity.
The spending fueling the boom hasn't let up, so should investors be buying the dip?
The AI Trade Just Had Its Worst Stretch in Months. Here Are 3 Reasons the Sell-Off Could Be a Buying Opportunity.
Overview
The artificial intelligence (AI) trade just went through its roughest stretch in months. After a nine-week run higher, the major indexes pulled back last week, and the selling peaked on Friday, when the Nasdaq Composite fell about 4.2% -- its steepest single-day drop since early 2025. Chip stocks took the worst of it, with the broad semiconductor group sliding about 10% in that single session.
The sell-off appeared to be tied to several things. Broadcom (NASDAQ: AVGO) posted record results but stopped short of raising its full-year outlook for AI chips, a hotter-than-expected May jobs report pushed bond yields higher and revived worries about a possible interest rate increase, and renewed tensions in the Middle East added to the unease. All told, about $1.3 trillion in value came off U.S.-traded chipmakers on Friday.
Details
But the businesses behind those stocks look as healthy as ever. And shares briefly bounced, with the Nasdaq rising about 0.9% on Monday as the names that led the drop led the recovery. But skittishness in the sector returned on Tuesday.
Source
Originally published at www.fool.com.
