AI Stock Meltdown: US markets witnessed a sharp selloff in artificial intelligence (AI)-linked stocks this week, erasing nearly $1 trillion in combined market capitalization. Shares of top AI chipmakers — Nvidia, AMD, Broadcom, and Super Micro Computer — fell between 10 to 16 per cent over the week, marking the steepest decline in months.
Nvidia sees biggest weekly fall of the year
Nvidia shares slipped 7 per cent this week — the company’s worst weekly performance of 2025. AMD dropped nearly 12 per cent, while Broadcom and Super Micro Computer lost up to 16 per cent each. This selloff dragged the Nasdaq Composite Index down by about 3 per cent for the week, its worst performance since April 2018, when the Trump administration announced broad tariff plans.
Analysts attribute the fall to widening valuation gaps between earnings growth and stock prices. Many AI firms have seen rapid price appreciation this year without a matching rise in profits, creating what experts call an “AI valuation bubble.” The recent correction reflects investor caution after months of exuberance.
Tighter US export rules add pressure
Adding to the weakness, the US government’s tighter stance on semiconductor exports to China has raised concerns about growth prospects for chipmakers. The new export controls are expected to weigh on revenues from key overseas markets.
AI uncertainty spills over to tech sector
Broader tech sentiment also took a hit. Shares of Palantir dropped 11 per cent last week, Oracle fell 9 per cent, while Meta and Microsoft declined around 4 per cent each despite signaling continued AI spending.
Wall Street overview
US stock markets ended mixed on Friday, weighed down by worries about the economy and elevated valuations in the technology sector. However, US stock futures rose on Monday after reports indicated lawmakers were close to finalizing a deal to end the historic US government shutdown.
The Dow Jones Industrial Average gained 74.80 points, or 0.16 per cent, to 46,987.10, while the S&P 500 rose 8.48 points, or 0.13 per cent, to 6,728.80. The Nasdaq Composite, however, closed 49.45 points, or 0.21 per cent, lower at 23,004.54.