Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTShashwat ChauhanTue, June 23, 2026 at 12:33 PM GMT+2 3 min readBy Shashwat ChauhanJune 23 (Reuters) - U.S. chip stocks fell from record highs on Tuesday in a reversal for buyers of shares linked to the AI infrastructure buildout that has powered the market over the past year.The Nasdaq Composite index fell 2.2%, led by a 7.9% decline in the semiconductor index that has emerged in recent months as the leader of a record-setting rally. Micron Technology, one of the biggest gainers of the latest stage of the AI boom, tumbled 13%.The tech selloff has pushed the Nasdaq down more than 5% from its peak on June 2, pulling back after a blistering 30% rally that started at the beginning of April. The world's most valuable company, Nvidia, dropped 4.1%, pushing its market cap below $5 trillion. It and Tesla, down 5.8%, were among the biggest drags on the Nasdaq outside the chip sector.Tuesday's chip rout was a setback for a market whose sharp recovery from the March 30 Iran war lows has surprised even die-hard bulls, and pointed out the risks accumulating in indexes such as the Sox, which even after the pullback is up 72% since then.Elon Musk's SpaceX briefly traded below $2 trillion in market cap for the first time since its debut earlier this month before rebounding into positive territory and closing 1% higher.Chipmakers clocked heavy losses, with Qualcomm down 8% and Marvell down 9.4%. Micron will report earnings after the markets close on Wednesday."The trade has been highly concentrated and flow-driven, which makes it vulnerable to relatively small shifts in sentiment," said Ross Mayfield, investment strategy analyst at Baird."It doesn't appear to be closely tied to the fundamentals of the AI story, but rather to the heavy concentration and strong inflows into global tech over the past few months now starting to unwind."Memory chipmakers — the best-performing stocks on the S&P 500 so far this year — lagged on Tuesday, with SanDisk falling 14% and Western Digital losing 8.5%. Memory chipmakers in South Korea also recorded steep declines.TECH GIANTS MIXEDOther tech heavyweights were mixed, with Alphabet off 1%, Apple off 0.9% and Microsoft up 1.8%. Software stocks like Workday and Salesforce were also higher; those shares sold off heavily earlier this year on AI-linked fears.Commonly dubbed hyperscalers, these firms have committed billions to ramp up their AI infrastructures, though clearer evidence that AI products can generate returns justifying the spending remains elusive.Lauren Hyslop, investment manager at Mattioli Woods, said the selloff was due to a more challenging interest-rate backdrop and concerns about the scale of capital required to fund the next phase of AI investment.Terms and Privacy PolicyPrivacy & Cookie SettingsMore Info