AI Stocks Wipe Out $1.3 Trillion in Value as Chip Selloff Marks Steepest Plunge Since 2020 Pandemic Crash

AI and semiconductor stocks suffered a historic rout on Friday, June 5, 2026, wiping out approximately $1.3 trillion in market value. The Philadelphia Semiconductor Index (SOX) plummeted 10.3%, its worst single-day drop since the COVID-19 pandemic roiled markets in March 2020. The selloff was triggered by Broadcom (AVGO), whose latest earnings, though beating estimates, revealed AI chip growth that fell short of lofty investor expectations. The declines were broad-based: Micron (MU) tumbled 13.3%, Intel (INTC) dropped 11.3%, and AMD slid 10.9%. The flight from momentum stocks intensified after the Labor Department reported May nonfarm payrolls surged by 172,000—nearly double forecasts—reigniting fears of further Federal Reserve rate hikes. Shorter-dated Treasury yields jumped, and swaps now price in a quarter-point rate increase by year-end. Marvell Technology (MRVL) bucked the trend in after-hours trading, rising 6% after S&P Dow Jones Indices said it would join the S&P 500 in its latest quarterly rebalancing.