Semiconductor stocks fell sharply in early premarket trading on Friday, extending the previous session’s losses and deepening a tech rout that has investors worried the reversal after the past year’s red-hot rally may be underway.
SanDisk stock declined 6%, leading the pullback, while Micron declined 4.4%. Intel and Advanced Micro Devices fell just over 4%, and the chip sector benchmark, the iShares Semiconductor ETF (SOXX), fell 3.6%.
Until Thursday’s close, SOXX declined 8.8% and is heading for its worst weekly performance since March 2025. The Invesco QQQ Trust Series 1 (QQQ) was down 2.7%, while the SPDR S&P 500 ETF Trust (SPY) slipped 0.6%, underscoring how the chip selloff is weighing on the broader market.
AI-linked companies such as Marvell Technology and CoreWeave fell around 4.6% and 3.7%, respectively. Marvell designs chips and networking hardware that power AI data centers, cloud computing, telecom networks and enterprise infrastructure, while CoreWeave is the leading neocloud firm in the U.S.
Tech Rotation
A tech rotation appears to be underway, with investors closely watching chip stocks after their slide from June highs, along with daily developments in the U.S.-Iran standoff and the second-quarter earnings season for direction.
The current tech rotation is a shift away from high-flying AI chip stocks and toward relatively cheaper Big Tech software and internet names, following an extended semiconductor rally.
The move is being driven by profit-taking in richly valued chipmakers, rising uncertainty around AI spending, and geopolitical risks, with many betting that companies such as Microsoft, Apple, Alphabet, and Meta offer a better near-term risk-reward than semiconductor stocks after their massive run-up.
Retail Remains Bullish On Memory Stocks
Among the market’s hottest themes, retail traders see the memory space as the strongest area to stay invested in. In a Stocktwits with about 12,000 votes, 44% said they are most interested in investing in memory stocks, while 29% picked neoclouds such as Nebius and CoreWeave and 27% picked space stocks including Rocket Lab and SpaceX.
The view on Micron remained particularly upbeat. “MU is the only real company on that list, that I own, that is the most profitable critical to AI and is a US company, and the rest are overvalued or not profitable enough or aren't a US company,” a trader .
On Stocktwits, retail sentiment was ‘bullish’ for Micron and SanDisk, while Intel and AMD drew ‘neutral’ sentiment, with traders looking ahead to Intel’s earnings next Thursday, the first major chipmaker to report.