Advanced Micro Devices (AMD) stock fell 5.7% on July 30 as a broad selloff in chip stocks deepened, driven by concerns about Chinese competition, excessive tech spending on artificial intelligence, and doubts about the sustainability of the AI boom.
The decline extended a volatile period for semiconductor makers that began in mid-July. On July 16, Taiwan Semiconductor Manufacturing Company (TSMC) reported strong earnings but raised its capital expenditure guidance to between $60 billion and $64 billion for 2026, a move that alarmed investors who worried about the financial returns on such heavy spending.
The selloff accelerated on July 28 when a Wall Street Journal report revealed that Nvidia could provide a roughly $250 billion backstop for a massive OpenAI data-center project, raising questions about whether chipmakers are investing excessively in their own customers. The same day, reports of Chinese progress in chipmaking—including a stratospheric stock-market debut by Chinese memory-chip maker CXMT and information that China has begun manufacturing ultra-advanced chipmaking equipment—heightened concerns that the West could lose its dominance in critical semiconductor supply chains.
Kyle Rodda, senior financial market analyst at online brokerage Capital.com, told the Wall Street Journal that investor anxiety centers on whether heavy spending by tech giants including Microsoft, Meta, Apple, and Amazon “will eat into returns.” These companies are scheduled to report earnings later in the week.
The decline in AMD stock is part of a broader rout in chip stocks. ARM Holdings fell 8% on July 29, while SanDisk dropped 14% on the same day. The SMH semiconductor ETF, which tracks the 25 largest U.S. semiconductor companies, fell 3.4% on July 28 as the sector faced what analysts described as fresh AI concerns. Earlier in July, the semiconductor sector had already endured significant losses: on July 19, Intel fell 13.5%, Micron fell 13.3%, and AMD itself fell 11.1% in a single week, with the broader semiconductor ETF dropping about 9%.
The July selloff echoes earlier volatility in June, when roughly $1.3 trillion in semiconductor market value was wiped out, according to Reuters. That earlier decline was triggered partly by fear that hyperscalers’ 67% jump in AI capital expenditures to $650 billion may be unsustainable. Investors have repeatedly sold chip stocks after strong earnings reports when companies signal heavy spending ahead, suggesting that valuations and return-on-investment concerns outweigh optimistic near-term growth forecasts.
AMD shares have been particularly volatile. The stock surged 5% on July 20 after Microsoft announced an expanded AI infrastructure deal, only to give back those gains and more in the subsequent days. The broader pattern reflects investor uncertainty about whether the AI investment cycle will deliver proportional returns or whether the sector is overextended.
Sources
- Wall Street Journal — reported on July 28 the factors driving chip stock selloffs, including Nvidia’s OpenAI data-center project, Chinese chipmaking advances, and tech giants’ heavy spending concerns
- Forbes — reported in July that hyperscalers’ 67% jump in AI capital expenditures to $650 billion raised sustainability concerns
- CNBC — reported on July 28 that semiconductor stocks fell, extending a rout in chipmakers
- Barron’s — reported on July 16 that TSMC stock dropped after raising capital expenditure guidance despite strong earnings
- Bloomberg — reported on July 17 that TSMC’s raised spending and revenue projections triggered a chip stock rout in Asia
- MetaTradingClub — reported on July 19 that Intel fell 13.5%, Micron fell 13.3%, and AMD fell 11.1% in the week, with the semiconductor ETF down about 9%
- Reuters — reported that roughly $1.3 trillion in semiconductor market value was wiped out in June 2026
