Continued sell-off on tech after Broadcom collapse, St at the tail end in Milan
The US chip manufacturer disappointed market expectations. All European stocks from Infineon to the Dutch Asm, Asml and Be Semiconductor fell. Fears of an AI bubble continue to swirl, but the stock's performance since the beginning of the year remains more than positive
(Il Sole 24 Ore Radiocor) - The sell-off on technology stocks continued after Broadcom's disappointing indications on sales of artificial intelligence chips rekindled doubts about the resilience of the AI sector. Proof of this is that the Nasdaq closed negative on the eve of the session (and futures are down today) while Tokyo (-1.3%) and the Korean Kospi (5.5%) have already closed the session in the red, weighed down by tech stocks.
The US chipmaker missed market expectations, estimating third-quarter fiscal revenues of $16 billion (versus estimates of $17.2 billion) and full-year AI chip sales of $56 billion (versus estimates of $57.6 billion). The disappointing outlook weighed not only on Broadcom's stock performance (which closed down 12.6% in the previous session on 4 June), but on the entire tech sector. Thus, after yesterday's declines, the sales on European stocks in the sector continued, with StMicroelectronics dropping more than 3% in Milan and Paris, bringing it to the tail end of the Ftse Mib, while in Frankfurt Infineon fell about 5 percentage points during the morning and Schneider Electric lost about 2 percent. Also in the red were the Amsterdam-listed biggies Asm International, Be Semiconductor and Asml Holding-
"Broadcom's disappointing results triggered profit-taking across the semiconductor sector and gave investors a reason to pause after the recent artificial intelligence-fuelled rally," notes City Index's Fiona Cincotta. "Broadcom's results suggest that investor expectations may have outweighed fundamentals," she adds, as fears of an AI-related speculative bubble continue to dominate the market.
Yet, although all stocks in the sector in this session (Friday 5 June) are down, it should be noted that the balance since the start of the year remains more than positive, with St gaining over 185% in six months in both Milan and Paris, Infineon over 110% in Frankfurt, while in Amsterdam Asml has advanced by almost 60% since the start of the year. Asm by over 65% and Be Semiconductor by over 100%.
