Chip selloff erases over $1 trillion in stock market value

By Noel Randewich

June 5 (Reuters) - U.S.-traded chipmakers plunged on Friday, losing over $1 trillion in market value, with deep losses in AI heavy hitters including Nvidia, Micron Technology and Advanced Micro Devices, as Broadcom's weak report earlier this week reverberated across Wall Street.

The PHLX chip index slumped almost 8.5% in afternoon trading, putting it on track for its deepest one-day loss since Wall Street's "Liberation Day" tariff selloff in April 2025.

Friday's selloff added to losses on Thursday after Broadcom gave a quarterly report that showed demand for its ‌custom AI chips business falling short of lofty expectations. 

The PHLX's combined loss of more than 10% over two sessions shows investors are becoming more concerned about pricey, high-flying tech stocks just as Elon Musk prepares a blockbuster initial public offering next week for SpaceX at an exceedingly high $1.75 trillion valuation.

Even after Friday's losses, the PHLX chip index remains up 75% year to date.

Nvidia, the world's most valuable chipmaker, fell about 6%, cleaving more than $300 billion from its market capitalization.

Micron Technology tumbled 11%, evaporating $127 billion in market value. Recent investor darling Marvell Technology gave back 12%, while AMD lost 10.5%.

"You've had a lot of people here that were just blindly buying the dip," said Dennis Dick, a proprietary trader at ​Triple D Trading. "Blindly buying the dip had been winning you money, but that ended today."

Worries about higher interest rates also spooked investors across the U.S. stock market following stronger-than-expected jobs data, and the S&P 500 was down 2.3%. 

One of the ​biggest beneficiaries of the ⁠AI race, Broadcom, was last down 7.5%, bringing its two-day loss to 19%.

(Reporting by Noel RandewichEditing by Rod Nickel)