Global AI and Chip Stocks Shed $1.64 Trillion in Six Sessions as Spending Doubts Deepen

Global semiconductor and AI stocks suffered their worst week since the April 2025 tariff shock, with the Philadelphia Semiconductor Index sliding through eight consecutive losing sessions — its longest run since 2008 — and wiping roughly $1.64 trillion in market capitalisation from the sector. By Friday October 17, the Nasdaq Composite had fallen more than 4% for the week, its worst weekly showing since June, while the Nasdaq 100 dropped 5.5%. The rout was triggered by a collision of forces: a September US inflation reading of 3.7% reduced hopes for near-term Federal Reserve rate cuts, raising the cost of the vast debt-financed data-centre buildout underpinning the AI boom. Cloud infrastructure provider CoreWeave saw its bonds trade at distressed yields above 15%, while a Gartner projection warned that $7 trillion in cumulative AI investment through 2030 would generate only $3.6 trillion in data-centre revenue. Individual chip stocks bore steep losses: Arm Holdings fell 21%, Applied Materials dropped 16%, and Intel lost 13%. Rising oil prices — Brent crude touched $110 per barrel — compounded pressure by rekindling inflation fears. The sell-off spread globally, with Asia-focused hedge funds losing 2.9% for the week. TSMC's own record earnings the same week underscored how gains remain concentrated among a handful of dominant manufacturers rather than the broader sector.