Advanced Micro Devices tumbled Wednesday as worries about the sustainability of the artificial-intelligence boom hit the chip makers that make AI possible.
AMD performed worst among the biggest names in the space, tumbling 5.7% to $570.82, marking the stock's largest single-day percentage decline since Aug. 5, according to Dow Jones Market Data.
Nvidia dropped 3.2%, Broadcom fell 3.1%, and U.S.-listed shares of Taiwan Semiconductor Manufacturing dropped 3.4%. Custom hardware provider Marvell Technology fared even worse, sinking 8.7%.
Chip makers got hit from each side. On the supply front, a strong demand forecast from chip-equipment maker ASML Holding means chipmaking machines could get pricier. On the demand side, large cloud providers like CoreWeave had a horrid day amid a selloff in the company's corporate bonds.
AMD is in a particularly precarious position if AI demand isn't quite as strong as investors and executives have hoped, given the company is a distant second to Nvidia in the market for AI training processors. As one hedge fund manager told Barron's on Wednesday, if chips aren't actually scarce, why would buyers turn to AMD?
The company didn't respond to Barron's request for comment.
AMD also tends to move more sharply than the broader market regardless of what is happening in the wider AI trade. Over the last year, the stock had a beta -- a common measure of volatility -- of 3.2, meaning it is about three times more volatile than the broader market. Nvidia, Broadcom, and TSMC all had betas of between 1.9 and 2.2, according to FactSet.
The good news for chip stocks is that this isn't the first time the AI trade has sputtered in 2026. Spending forecasts from the big cloud providers -- due later this month and early next -- could ease investors' fears.
"I think this is just a little bit of maybe overdue skepticism in the markets," said Jim Lebenthal, chief market strategist at Cerity Partners. "I expect another reconfirmation of those spending plans, which I think may lay the skepticism about the chip stocks to rest."