Chip Stocks Extend Longest Losing Streak in 16 Years as AI Funding Worries Spread

Chip stocks closed lower for eight straight sessions through Thursday, their longest losing streak in 16 years according to Barchart, and the slide kept going on Friday. The iShares Semiconductor ETF (SOXX), a basket of about 30 U.S.-listed chipmakers, closed Thursday at $514.71, nearly 14% below its October high. Late Friday the fund was down about 4.1% at $493.39 in SentiSense's 15-minute-delayed data.

The pressure is coming from two directions. On demand, the piece that flagged the streak points to a report that OpenAI told investors its annualized revenue was near $50 billion, short of earlier $70 billion estimates, and notes that INTC has lost more than 20% in two weeks. On rates and funding, it cites a 3.7% year-over-year September CPI reading that topped forecasts and rising odds of another Fed hike. Bloomberg framed the week around tech's AI borrowing binge, noting that the pressure is most pronounced for second-tier tech giants such as ORCL and AVGO.

The stress is sharpest in the debt-funded "neocloud" names. The Globe and Mail reported that CRWV bond yields have risen above 15% in recent days, and that the stock fell 15% on Wednesday before bouncing nearly 6% on Thursday, while Cerebras lost about 13% and NBIS and IREN about 14% each since the start of the week. Even after a 19.64% drop over the past week, ARM is still up 122.44% this year and trades at about 302 times trailing earnings, which 24/7 Wall St. says justifies only a Hold.

Not everyone reads this as a broken AI story. UBS called the move "more of a recalibration of expectations than a fundamental break," and TSM reported a 68.7% jump in third-quarter profit even as its U.S. shares fell 1.8%. Big Tech still plans roughly $800 billion of capital spending this year, per Goldman Sachs. The near-term tells are funding costs for the most leveraged AI builders and whether SOXX holds the roughly $481 support level technicians have flagged.