AI Chip Stocks Tumble as Wall Street's Bulls Lose Their Nerve

A sharp pullback hit chip and AI-linked stocks on Thursday, dragging Wall Street lower even as most of the broader market held up.

According to AOL, Intel fell 6% to $119.83 at midday, leading a broad retreat across chipmakers, while Advanced Micro Devices slid 5% to $511.67. The drop came despite a bullish note from HSBC, which AOL reports still sees 60% upside for Intel.

The selling was steeper in memory hardware. Invezz reports that SanDisk plunged 14% in afternoon trading, hitting a session low of $1,707.58, as investors rotated out of AI chip and memory names — a slide that overshadowed positive analyst calls on the stock.

The Washington Post frames the day as AI stocks pulling the market lower even as the majority of US shares rose, suggesting the weakness was concentrated rather than broad-based.

Beneath the price moves, sentiment appears to be shifting. CNBC reports that tech bulls are losing conviction, with a key trading metric — demand for protective put options — blowing out to its widest level since 2008. That pick-up in hedging, CNBC notes, aligns with slowing momentum in AI stocks that had consistently rewarded upside bets. Options activity in Nvidia also points to moderately bearish sentiment, according to GuruFocus.

Why it matters: AI-linked chipmakers have powered much of the market's recent gains, so signs that traders are hedging against a downturn — rather than betting on more upside — could signal a broader cooling in one of the market's hottest trades.