Most of the major semiconductor names came under pressure on Tuesday in the US, with chip designers and manufacturers selling off after a strong recent rally.
Qualcomm (NYSE:QCOM) led the decline, falling 10% during the session, while weakness spread across much of the sector.
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The sell-off was not isolated to semiconductors. Broader tech stocks also moved lower as the wider market pulled back, with all major indices finishing in the red after the latest US retail inflation report.
Bond yields moved higher across the curve. The US 2-year Treasury yield rose 4 basis points to 3.99%, while the US 10-year Treasury yield also climbed 4 basis points to 4.46%.
The key takeaway is that inflation came in a little hotter than expected. April US core CPI rose 0.4% month-on-month, ahead of the 0.3% consensus and above the 0.2% recorded in March. On an annual basis, core CPI increased 2.8%, compared with expectations of 2.7% and the prior reading of 2.6%.
So while the inflation miss was not dramatic, it was enough to remind investors that the rate-cut path is still fragile. After a strong run in semiconductor stocks, the market did not need much of an excuse to take some profit off the table.
Why did Qualcomm fall much further than others?
Alongside the hotter CPI print, Tae Kim, author of The Nvidia Way, called Qualcomm the “problem child” of the chip rally in a recent Substack post.
His argument was that Qualcomm is losing share at Apple while the Android market remains under pressure. That combination makes the stock harder to defend after a strong sector-wide rally.
The concern is valuation. Qualcomm may no longer look cheap at current multiples if growth continues to deteriorate. If that pressure flows through to earnings, investors may start questioning whether the stock still deserves to trade at a premium.
What about the broader chip market
The pressure spread across the semiconductor sector.
Micron Technology (MU) fell 5.5%, AMD (AMD) dropped 3.4%, and Taiwan Semiconductor Manufacturing (TSM) lost 3.5%. The weakness was even sharper in some smaller and more cyclical chip names, with Navitas Semiconductor (NVTS) down 15%, Onsemi (ON) falling 7%, and Intel (INTC) sliding 8%.
Nvidia (NVDA) was the clear outlier. While most of the sector was being hit hard, Nvidia was down less than 1% during Tuesday’s trading.
By noon, the Philadelphia Semiconductor Index (SOX) had fallen 5%, showing this was a broad sector sell-off rather than a single-stock issue.
Part of the pressure was also being linked to South Korea, where lawmakers are reportedly considering a new “citizen dividend” funded by taxes on AI-related profits. That matters for the memory market because Samsung and SK Hynix have been two of the biggest winners from AI-driven demand. Samsung shares in South Korea are up 117% year to date, while SK Hynix has surged 170%.
Other AI-linked names were also caught in the pullback. Nebius (NBIS) fell nearly 7%, IREN (IREN) slipped 2.6%, Applied Digital (APLD) dropped 6.5%, and CoreWeave (CRWV) also came under heavy pressure.ted 10%. Cloud and software provider Oracle (ORCL) had declined 5%.
