Chip Stocks Slide 6.3% as JPMorgan Flags Unsustainable Rally
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- Semiconductor stocks extended their selloff for a second day, with the chip index tumbling 6.3% on Wednesday — Micron fell as much as 10.6% while Applied Materials, Lam Research, Allegro MicroSystems, and Intel each dropped more than 9%
- Premarket losses continued Thursday, with Micron and Western Digital each down about 2.1% by 04:42 ET, Coherent shedding roughly 2%, Marvell down 1.8%, and AMD, Intel, and Microchip Technology each edging about 1% lower
- JPMorgan analyst Nikolaos Panigirtzoglou said the outperformance of chipmakers versus hyperscalers since last September "appears somewhat unsustainable in the long run"
- Meta Platforms rallied 8.8% on Wednesday after Bloomberg reported the company is building a cloud business to sell excess AI computing capacity, with Meta debating whether to offer access to hosted AI models or to raw compute power
- Meta told investors in April it plans to spend up to $145 billion on capital expenditures this year, and the new cloud venture would put it in direct competition with Amazon, Microsoft, Google, and CoreWeave
- The volatility comes ahead of Thursday's monthly U.S. jobs report, with markets closed Friday for the Fourth of July holiday
Why it matters: Semis fell 6.3% as JPMorgan flagged the chip-vs-hyperscaler outperformance since September as unsustainable. Meta's 8.8% rally on news it will sell excess AI compute directly turns the $145 billion capex buyer into a competitor of Amazon, Microsoft, Google, and CoreWeave — validating the investor unease driving the chip selloff.
