The AI stock trade is pulling apart at the seams.
According to George Steer of the Financial Times (via Techmeme), US chip, memory, and storage stocks fell sharply on Thursday as investors pulled away from the shares that have led markets higher this year. Sandisk dropped 13%, Seagate 10%, and Western Digital 9%, while Intel and Micron each lost 6%.
The selling wasn't contained to the US. Reports carried by the Canadian Press and the Traverse City Record-Eagle both described slumping AI stocks dragging down markets around the world.
Yet the picture is far from uniform. Even as much of the sector sank, TradingView reported that Nvidia's stock was rallying again, with Wall Street weighing in on the move. That split — some AI-linked names collapsing while the sector's bellwether climbs — is the defining feature of this moment.
The damage over a longer stretch has been steep for some names. Yahoo Finance noted that Palantir and Sandisk were down 35% and 25% respectively, framing them as a study in which battered stock is actually worth buying.
Why the sudden sensitivity around chips? An MSN report argues that AI has upended the business: in the second quarter, the composition of chipmaker sales shifted so heavily that, as it put it, "AI took over." That concentration cuts both ways, rewarding companies on the right side of demand and punishing those seen as exposed.
The theme runs deep into major portfolios, too. Yahoo Finance reported that Warren Buffett's successor Greg Abel has nearly 30% of Berkshire Hathaway's $351 billion portfolio in two AI stocks.
Why it matters: when a handful of AI names carry entire indexes, a divergence like this one signals that the market is starting to separate winners from losers — and everyone's retirement account is along for the ride.