The chip selloff is continuing. Broadcom shares dropped another 1.9% in premarket trading on Friday after falling 13% on Thursday, wiping out about $286 billion in market value in one day. This was the fourth-largest single-day loss for any U.S. company. The rest of the semiconductor sector is also down for a second day. Here’s what caused the selloff and whether the chip rally that pushed markets to record highs is losing steam.
Thursday’s drop started after Broadcom released its fiscal second-quarter earnings. While results were better than expected, the company’s revenue outlook fell short. Investors were also unsettled when the CEO said on the earnings call that Google, a major custom-chip client, might look for other suppliers. That news hurt the stock more than the financial results did.
Losses continued across the sector on Friday. Micron Technology fell 3.2%, Advanced Micro Devices dropped 3.2%, Intel lost 3.1%, and Marvell Technology was down 3.6% in premarket trading. The PHLX Semiconductor Index is up 92% in 2026, but it fell more than 2% on Thursday, making some wonder if the rally is slowing down.
The two-day drop does not mean the cycle is over. Top chip companies like Nvidia, AMD, Broadcom, Taiwan Semiconductor Manufacturing, and Micron are still expected to do better than the overall market, even if their gains slow down from earlier this year. As investors become more selective, the gap between leading companies and the rest of the sector will likely grow in the coming months.
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