Semiconductor stocks keep falling as investors go risk-off, Chinese startup releases powerful new AI model

Semiconductor stocks fell on Friday as investors turned risk-off, with Micron, Sandisk, and Western Digital dropping over 2% and chipmakers like Nvidia and AMD also declining. The sell-off was fueled by concerns over AI infrastructure spending returns and competition from Chinese startup Moonshot's Kimi K3 AI model, the world's largest publicly available downloadable model.

Semiconductor stocks keep falling as investors go risk-off, Chinese startup releases powerful new AI model What happened: Semiconductor stocks retreated on Friday. Memory and storage highfliers Micron Technology MU https://finance.yahoo.com/quote/MU/ and Sandisk SNDK https://finance.yahoo.com/quote/SNDK/ stocks dropped more than 2%, and Western Digital WDC https://finance.yahoo.com/quote/WDC/ fell more than 3% in premarket trading. Chipmakers, including Nvidia NVDA https://finance.yahoo.com/quote/NVDA/ , AMD AMD https://finance.yahoo.com/quote/AMD/ , Broadcom AVGO https://finance.yahoo.com/quote/AVGO , Intel INTC https://finance.yahoo.com/quote/AMD/ , and Marvell MRVL https://finance.yahoo.com/quote/MRVL , also moved lower. Qualcomm QCOM https://finance.yahoo.com/quote/QCOM/ retreated as well. Among semiconductor equipment makers, Applied Materials AMAT https://finance.yahoo.com/quote/AMAT and Lam Research LRCX https://finance.yahoo.com/quote/LRCX/ each declined more than 4%. Going into Friday's trading session, global semiconductor stocks had shed $3.3 trillion https://finance.yahoo.com/markets/article/the-33-trillion-chip-sell-off-is-nearing-a-bear-market-chart-of-the-day-100000286.html in market value since June 22. What's behind the move: Semiconductor stocks have been volatile in recent weeks over concerns that investors will want to see a return on investment from big spenders on AI infrastructure. Artificial intelligence costs have been on the rise. Taiwan Semiconductor Manufacturing Company TSM https://finance.yahoo.com/quote/TSM/ this week guided to higher-than-anticipated capital expenditures, in part due to higher tool costs. Growing global competition in AI is also weighing on sentiment after Chinese startup Moonshot unveiled Kimi K3 https://finance.yahoo.com/technology/ai/articles/chinas-moonshot-unveils-worlds-largest-020622030.html , believed to be the world's largest publicly available AI model that developers can download and run themselves. The launch highlights the rapid progress of China's open AI ecosystem, coming a month after the US withdrew Anthropic's ANTH.PVT https://finance.yahoo.com/quote/ANTH.PVT/ Fable and Mythos models over security concerns. Meanwhile, on Thursday, Bloomberg reported that Alphabet GOOG https://finance.yahoo.com/quote/GOOG , GOOGL https://finance.yahoo.com/quote/GOOGL/ was behind schedule in delivering Gemini 3.5 Pro, its most powerful AI model. What else you need to know: Semiconductor companies have been a key beneficiary of the artificial intelligence build-out. Wall Street is still positive on the AI trade but will be looking toward earnings to drive the sector and overall market higher. Particularly, spending on AI will continue and is justified. "What we definitely need to see continue, though, is hyperscalers' capex," Principal Asset Management chief global strategist Seema Shah told Yahoo Finance earlier this week. "Their earnings need to be strong," she added. "They are really the foundation for the entire AI ecosystem." Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines ferre . Click here for in-depth analysis of the latest stock market news and events moving stock prices Read the latest financial and business news from Yahoo Finance