US semiconductor stocks looked set for a weaker start on Wall Street on Friday as investor enthusiasm around artificial intelligence continued to cool following a series of disappointing sector performances.
Futures pointed to a softer opening for technology shares, with the Nasdaq 100 down 0.9% in premarket trading. The broader S&P 500 slipped 0.4%, while the Dow Jones Industrial Average outperformed, edging 0.2% higher.
Nvidia, the world’s most valuable company with a market capitalisation of approximately US$5.3 trillion, fell 1.5% in premarket trading. Other major chipmakers also came under pressure, with Intel, Micron Technology, AMD and Broadcom declining between 2% and 3.8%.
The weakness extends a sell-off that has swept through semiconductor stocks this week after Broadcom issued guidance that fell short of the market’s lofty expectations, prompting investors to reassess valuations across the wider AI ecosystem.
Chipmakers have been among the biggest beneficiaries of the artificial intelligence boom, helping drive Wall Street’s recovery from the sharp market decline triggered by the US and Israeli conflict with Iran earlier this year. Strong demand for AI infrastructure, data centres and advanced computing hardware has fuelled record earnings growth and substantial share price gains across the sector.
However, recent trading suggests investors are becoming increasingly selective as valuations reach elevated levels and expectations remain exceptionally high. Any signs of slowing growth or softer forecasts are now attracting a much stronger market reaction than earlier in the rally.
The sector’s pullback has weighed heavily on technology-focused indices, with futures indicating the Nasdaq 100 could open 0.9% lower. The broader S&P 500 was down 0.4% in premarket trading, while the Dow Jones Industrial Average was showing greater resilience, rising 0.2%.
Despite the recent weakness, many analysts continue to view artificial intelligence as one of the most significant long-term growth themes in global markets. However, after an extraordinary rally that has added trillions of dollars in value to leading semiconductor companies, investors appear increasingly focused on earnings delivery, margins and future growth expectations.
The performance of the semiconductor sector will remain closely watched as a barometer for broader sentiment towards AI-related investments and technology stocks in the months ahead.
