Broad tech selloff overnight with SPY -1.63%, QQQ -2.17%, and semiconductor equipment down sharply (SOXL -12.85%) following Google's TurboQuant algorithm announcement, which reduces AI memory requirements by up to sixfold. Memory chip stocks led the damage: MU -6.4%, WDC -6.9%, SNDK -9.1%, with semiconductor equipment names LRCX -8.8%, AMAT -7.8%, and KLAC -5.8% following suit on oversupply fears triggered by Micron's disappointing guidance. Additional headwinds include geopolitical chip export controls pressuring AMD -7.2%, securities fraud litigation on SMCI -8.1%, and profit-taking across recently surging names like COHR -9.5% (post-S&P addition), CIEN -9.5%, and VRT -7.7% (after 239% YoY rally).
Avoid semiconductor equipment and memory plays until demand clarity emerges post-Google's TurboQuant absorption into market models; LRCX, AMAT, MU face extended headwinds. Selectively nibble energy (VLO +5.5%) as refinery tightness supports upside, and monitor beaten-down tech infrastructure names (ANET -8.4%, LITE -9.5%) for oversold entry points once sector stabilizes—but wait for QQQ stabilization before adding meaningful exposure.