Chip Rout Deepens: SOX Down 23.5% From Peak as AI Fears and Middle East Tensions Mount
SOX has more than doubled off its 52-week low of $5,418.316.
Summary
The Philadelphia Semiconductor Index fell more than 2% on Friday, extending its losing streak to three days and pushing it 23.5% below its June 22 record close. The selloff is being driven by a combination of AI investment fatigue and the surprise release of Kimi K3, a massive open-weight AI model from Chinese startup Moonshot that rivals Anthropic's frontier systems. This challenges the narrative that U.S. chipmakers hold an unassailable lead in AI, raising fears of commoditization and reduced demand for premium hardware. Compounding the risk-off mood, escalating U.S.-Iran military strikes have disrupted the Strait of Hormuz, sending oil prices up over 2% and fueling a rotation into defensive assets like bonds and utilities. The SOX is now in a technical correction, with all 30 constituents declining in a broad-based rout that has erased months of gains. Traders are repricing the AI capex cycle as competition intensifies and geopolitical risks spike.
At the time of this announcement, SOX was trading at $11,644.18 on NASDAQ in the Technology sector. The 52-week trading range was $5,418.32 to $14,655.29. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Reuters.