US Tech Stocks Hit by Fresh Wave of Selling
The US tech sector has been hit by a fresh wave of selling, with Qualcomm and AMD being the hardest hit. Qualcomm warned that its revenue and profit would fall short of Wall Street estimates, resulting in a 15.2% decline in its stock price. Similarly, AMD’s stock price plummeted by 17.3% despite a 34% year-over-year rise in Q4 revenue, due to a cautious AI-chip revenue outlook.
Core Drivers of the Decline
The decline in these tech stocks can be attributed to several factors, including:
- Memory-chip shortages and higher component costs
- Revenue-forecast misses
- AI-chip growth uncertainty
- Elevated investor expectations
- Competitive pressure and inventory constraints
Expected Impact on the US Tech Sector
The sell-off in Qualcomm and AMD stocks is expected to have a broader impact on the US tech sector, including:
- A sector-wide rotation from high-growth semiconductor names to more defensive or value-oriented stocks
- AI-chip valuation pressure, with price-to-sales multiples likely to be compressed for other AI-focused chipmakers
- Earnings-forecast volatility, with analysts tightening consensus estimates for the whole semiconductor segment
- A focus on supply-chain risk, with investors favoring companies with diversified product mixes
- A potential broader tech pull-back, with the S&P 500’s tech weighting likely to keep the index under pressure