Tech stocks retreat on chip sell-off as Trump weighs AI stakes ahead of mega-IPOs
Investors digest a broad tech pullback and shifting regulatory landscape as OpenAI, Anthropic, and SpaceX prepare for major market debuts.
Technology shares faced significant pressure on Wednesday as a rout in the semiconductor sector weighed heavily on the broader market. The Philadelphia Semiconductor Index plunged nearly 9% at its intraday lows before a late-session rally narrowed the daily loss to 1.9%, according to data reported by Yahoo Finance. The sell-off occurred ahead of Oracle’s quarterly earnings report, with market participants closely monitoring the firm’s cloud revenue growth as a barometer for sustained demand in artificial intelligence infrastructure.
Amid the volatility, President Donald Trump announced plans to meet with executives from 12 to 15 leading artificial intelligence companies. The White House is considering taking government stakes in these businesses, a move Trump described as a potential mechanism to generate dividends for taxpayers. The president previously indicated that such investments could mirror the government’s support for firms like Intel during his second term, stating that whoever leads the AI sector will effectively lead the world.
The market is also bracing for a wave of high-profile initial public offerings. OpenAI has confidentially filed paperwork for its debut, setting up a direct competition with rival Anthropic, which filed its own IPO documents last week. Anticipation is similarly high for SpaceX, with its market debut expected to value the company at approximately $1.8 trillion. Retail trading data from Vanda Research indicates heavy selling in semiconductor names such as Micron and Sandisk, alongside record buying in space-related stocks, though Broadcom and Marvell continue to attract investor interest.
In company-specific developments, Intel shares surged more than 11% after reports emerged that Google had requested the chipmaker manufacture 3 million of its in-house Tensor Processing Unit chips. Morgan Stanley estimates Google will produce over 6 million TPUs through 2027 and 2028, providing a significant potential revenue stream for Intel as it seeks to capture market share from Taiwan Semiconductor Manufacturing Company. Nvidia and SK Hynix also announced a multiyear agreement to design AI memory chips, signalling continued collaboration in the hardware space.
Apple shares rose modestly following its Worldwide Developers Conference, where the firm unveiled iOS 27 and an AI-powered version of Siri. The new assistant, powered by Google’s Gemini model, allows for more conversational interactions and task completion. Despite the positive product announcements, some analysts noted a "buy on the rumor, sell on the news" dynamic, with investors remaining cautious about the timing of Apple’s AI delivery. Meanwhile, Anthropic launched its Claude Fable 5 model, introducing safeguards against high-risk applications such as cybersecurity vulnerabilities.
