Applied Materials, Lam Research, and ASML fell between 5% and 6% as market participants reassess the sustainability of AI-driven capital spending amid calls for slower model development.
Applied Materials fell 6% as AI pacing concerns threaten future fab equipment orders despite record revenue.
Lam Research dropped 6% amid fears that slower AI model development could reduce demand for chipmaking tools.
ASML sank 5% as the market questions whether hyperscaler AI capex will sustain its growth trajectory.
The semiconductor ETF fell 5%, reflecting broad sector weakness driven by equipment stock declines.
The S&P 500 ETF slipped only 0.78%, showing the sell-off is concentrated in chip equipment rather than the broad market.
Semiconductor equipment leaders Applied Materials, Lam Research, and ASML tumbled on Monday as industry leaders called for a deceleration in AI model development. Investors fear that a shift in AI capital expenditure strategies could jeopardize the long-term order books for fab tools, despite record-breaking revenue reports from major players.
The sell-off is driven by concerns that AI companies may slow the pace of model development, which could lead to a reduction in future capital expenditure for new semiconductor fabrication capacity.