AI chip stocks extended their decline on Friday despite TSMC reporting record quarterly earnings, as broader market turbulence weighed on the semiconductor sector. The Taiwan Semiconductor Manufacturing Company posted better-than-expected results driven by strong demand for AI accelerators, but the positive news failed to stem the sell-off in chip stocks.
TSMC reported that its revenue and profit both exceeded analyst estimates, with the company confirming that it expects capital expenditure to reach $64 billion in 2026 as it expands capacity for advanced node manufacturing. The company also announced an additional $100 billion investment in its Arizona operations, planning at least four more 2nm fabrication plants in the United States.
Despite the strong results, semiconductor stocks broadly declined as investors digested a combination of factors including concerns about export controls, geopolitical tensions, and a rotation out of AI-linked names that had rallied sharply earlier in the year. The Philadelphia Semiconductor Index fell several percentage points, dragging down stocks across the sector.
Adding to the pressure, China’s Moonshot AI released its Kimi K3 model, a 2.8-trillion-parameter open-weight AI model that rivals leading US systems. The release raised questions about the effectiveness of US export controls designed to limit China’s AI capabilities and whether American AI chip makers can maintain their competitive advantage.
Netflix also disappointed with its quarterly guidance, adding to the negative sentiment in technology stocks. SpaceX shares fell below their IPO price for the first time, and oil prices surged to $81 per barrel amid geopolitical tensions, creating a broad risk-off environment across financial markets.
This article was adapted from Blockonomi. Read the original here.
