Broadcom, Micron and ARM sink, leading chip stocks lower
Technology stocks fell with chip makers on Thursday broadcom And Micron Technology It led to losses as investors fled the semiconductor space.
Broadcom shares fell 13% after the company, which designs and manufactures customized AI chips for other tech names, reported weaker-than-expected earnings on Wednesday.
Micron Technology fell more than 6%.
Keybanc Capital Markets equity research analyst John Vinh said the increased pressure on Broadcom and other semiconductor stocks is justified.
“These stocks have all made very strong gains,” Vinh told CNBC’s “Squawk Box” on Thursday, pointing to repeated upward revisions, especially on the artificial intelligence front. Vinh suggested that Broadcom’s reversal shows that market expectations are catching up with the chip industry’s rally.
Broadcom.
Elsewhere, ARM Holdings shares fell 6 percent Qualcomm fell 3% and Intel fell 2 percent AMD fell 3 percent. Marvel Technology Shares initially fell on Thursday but later turned positive.
In a note published Thursday, HSBC analysts led by multi-asset strategist Max Kettner cited a decline in chip prices as well as a slowdown in AI spending and rollouts among their “biggest concerns.”
Vinh stated that Broadcom suffered some share loss in Google, its largest customer, which started to turn to other chip suppliers.
“The short-term pullback makes sense,” Vinh said, but added that he remained optimistic about Broadcom.
Keith Lerner, Truist Wealth’s CIO and chief market strategist, said selling is normal after a strong rally and added “it’s time for us to rest.”
“We’ve come a long way. The fundamentals are solid,” he said Wednesday on CNBC’s “Closing Bell.”
“The bull market still deserves the benefit of the doubt, but most of the time markets take two steps forward, one step back. We’ve taken three steps forward, so maybe we can at least take a small step back or at least move sideways a little bit,” Lerner said.
