The global artificial intelligence-fuelled rally in semiconductor stocks suffered a sharp setback last week, prompting investors from Asia to the United States to reassess whether expectations surrounding AI spending have become overly optimistic.
The selloff, which hit many of the market's biggest winners this year, triggered broad profit booking across AI-linked and momentum stocks that had driven equity market gains for much of 2026. According to Reuters, the sudden reversal has raised concerns over stretched valuations, heavy investor positioning and the sustainability of massive AI-related capital expenditure.
