Broad tech selloff overnight as semiconductor names cratered on AI sustainability fears and competitive threats. ARM (-7.7%), INTC (-6.2%), MU (-5.6%), and SMCI (-6.3%) all stumbled despite underlying AI demand strength, with analyst warnings about the trade's durability weighing heavily. Profit-taking hit recent winners hard—CIEN down 5.7% after a 90% three-month run, NEM off 6.1% despite a monster 148% one-year gain. Only bright spots: DXCM (+5.7%) on Elliott activist involvement and 2030 guidance, NOW (+5.3%) on enterprise agentic AI traction, and FDS (+5.8%) on earnings estimate revisions. Broader indices reflected the pain: QQQ -1.28%, TQQQ -3.90%, SOXL down 9.43%.
Avoid chasing semiconductor names into this weakness—the sector is rotating on macro concerns, not fundamentals, and further consolidation likely. Consider entry points in quality software plays like NOW that show pricing power and actual production AI adoption, and contrarian accumulation in oversold names like CHTR and SMCI if Q2 guidance stabilizes. Stay defensive on momentum plays that've run 90%+ in three months; let the dust settle before re-engaging chip infrastructure bets.