AI Trade Pauses as Semiconductor Rally Loses Momentum After Broadcom Sell-Off

The global artificial intelligence (AI) trade paused last week as semiconductor stocks pulled back from recent highs, ending a prolonged rally that had driven markets to record levels, Ines Ferré reported for Yahoo Finance.

Broadcom's outlook for AI-related chip demand was seen as underwhelming compared with elevated market expectations. (Photo: Broadcom)

The S&P 500 ended its nine-week winning streak, while the Nasdaq also retreated from recent highs.

Investors shifted away from high-growth technology stocks, particularly semiconductor firms, and moved toward more defensive sectors such as healthcare and financials.

Market attention focused on Broadcom, whose weaker-than-expected guidance triggered a sharp sell-off in chip-related stocks.

The company’s outlook for AI-related chip demand was seen as underwhelming compared with elevated market expectations. Broadcom shares fell significantly following the announcement, contributing to broader weakness across the semiconductor sector.

Despite the pullback, analysts described the move as a potential consolidation phase rather than a structural shift in long-term AI investment trends.