Semiconductor stocks plunged for the second straight day as investors weighed the impact of President Donald Trump's tariffs on imports. Nvidia stock was among those hard hit.
The Philadelphia Semiconductor Index, known as SOX, dropped to its lowest level since November 2023 on Friday. The SOX includes the 30 largest semiconductor stocks traded in the U.S.
The iShares Semiconductor ETF, which tracks the SOX index, fell 7.5% on Friday. On Thursday, it cratered 10.1%.
Semiconductor stocks tied to the artificial intelligence megatrend also got walloped. Nvidia stock dropped 7.4% to close at 94.31. Earlier in the session, it hit its lowest level since last August. On Thursday, Nvidia stock fell 7.8%.
Among other AI-focused chip stocks, Broadcom retreated 5% on Friday after falling 10.5% on Thursday. Marvell Technology plummeted 11.2% on the stock market today, after sinking 12% on Thursday.
Trump announced his widespread "Liberation Day" trade tariffs late Wednesday. China retaliated by announcing additional tariffs of 34% on U.S. goods. The trade war has sparked fears of a recession.
The Trump tariffs could hamstring Big Tech's multibillion-dollar efforts to build AI infrastructure in the U.S., Oppenheimer analyst Rick Schafer said in a client note Friday. And leading the AI race is a key goal of the Trump administration, he said.
China's reciprocal tariffs will negatively impact U.S. chipmakers that have the most exposure to the Chinese market, including automakers there, Piper Sandler analyst Harsh Kumar said in a report Friday.
Semiconductor stocks with the highest exposure to China, based on last fiscal year results, included Qualcomm at 46% of sales, Marvell at 43% and Semtech at 43%, Kumar said.
The Trump tariffs also slammed stocks that make personal computers and consumer electronics, which are big buyers of semiconductors. Analysts are worried that the tariffs will lead to price hikes, which will hurt device sales.
Apple and other device makers manufacture many of their products in China.
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