The AI Trade Wobbles
Wall Street opened mostly lower Thursday as chipmakers extended their slide, dragging the Nasdaq Composite and the S&P 500 down with them. The Dow Jones Industrial Average bucked the trend, according to Investopedia, but the mood in semiconductors was grim. Marvell led the retreat, sinking 8% amid growing worries — flagged by 24/7 Wall St. and Yahoo Finance — that the artificial-intelligence spending boom may finally be cooling.
Those fears run deeper than one bad session. A Yahoo Finance report warns the AI theme has grown so dominant that investors can no longer sidestep it — it has effectively taken over the market — and some observers are even invoking a possible 'Lehman moment' if the trade unwinds. When a single theme is this systemic, every chip stock stumble becomes a referendum on the whole rally.
TSMC's Record Cuts Against the Gloom
Not all the news pointed downward. Taiwan Semiconductor Manufacturing Company, the world's largest contract chipmaker, reported a record second-quarter profit on Wednesday, July 16. Per Reuters, net profit jumped 77% from a year earlier, far surpassing expectations as AI chip orders continued to pour in. It's a striking split-screen: the company at the center of AI manufacturing is minting records even as investors fret that the demand behind it is peaking.
Google Stumbles, Alphabet Feels It
Alphabet shares slipped after Bloomberg, citing unnamed sources, reported that Google is months behind on delivering Gemini 3.5 Pro, its most powerful AI model. Delays at the frontier of the AI race carry weight, and the market wasted no time pricing in the setback for one of the sector's marquee names.
That stumble arrived just as Wall Street is busy ranking the AI megacaps against one another. A widely syndicated Yahoo Finance analysis framed Amazon versus Alphabet as a head-to-head fight for investor dollars, with analysts split on the better bet. A broader wave of commentary is sizing up the entire 'Magnificent Seven,' as investors try to pin down which member offers the cleanest exposure to the AI boom.
Microsoft's Contrarian Champion
Amid the skepticism, Citi went the other way. On CNBC on Wednesday, the firm made an optimistic call on Microsoft's Copilot, the company's flagship AI assistant — a stance that turned heads precisely because much of the Street has dismissed the product as subpar. In a week defined by cooling sentiment, a bullish contrarian take stands out.
Apple's China Breakthrough
Apple finally cleared a hurdle years in the making: Chinese regulators granted it a license to launch Apple Intelligence on iPhones in China after roughly two years of waiting. There's a catch to the approval, but the market reaction was immediate — Chinese tech names Alibaba and Baidu popped on the news, a reminder that AI access in the world's largest smartphone market ripples well beyond Cupertino.
SpaceX Slips Below Its Debut
Finally, a milestone no company covets. According to CNBC's Samantha Subin, SpaceX shares fell for a fourth straight session on Wednesday, briefly dipping below the $135 price at which the company went public — the first time it has traded under its IPO level. It's a sobering coda to a day when even the market's biggest stories couldn't escape the gravitational pull of the AI trade.
The bottom line: record profits and regulatory wins are colliding with real anxiety that AI spending has run ahead of itself. Thursday's tape suggests investors are starting to ask harder questions — and the answers will shape where this rally goes next.