Key Highlights

  • Broadcom (Nasdaq: AVGO) extends Thursday's 13% crash, slipping a further 1.9% in premarket Friday trading.
  • Thursday's selloff wiped $286 billion from Broadcom's market cap, the fourth-largest single-day valuation loss in U.S. history.
  • Micron (NASDAQ: MU), AMD (NASDAQ: AMD), Intel (NASDAQ: INTC), and Marvell (NASDAQ: MRVL) all decline more than 3% ahead of Friday's open.
  • The PHLX Semiconductor index (PHLX: SOX) sits 92% higher in 2026, but risks losing steam.

The semiconductor sector's stunning 2026 run may be hitting a wall. Investors who hoped Thursday's brutal chip selloff was an isolated event were dealt a sobering reality check Friday morning as leading semiconductor names extended their declines in premarket trading, pointing to a second consecutive session of broad losses across the group.

Broadcom (NASDAQ: AVGO) was the clear epicentre of the pain, slipping a further 1.9% to $412 ahead of Friday's open. The move followed an extraordinary 13% collapse on Thursday — one of the most dramatic single-day drops in the stock's recent history — after the company's Revenue guidance failed to excite investors despite an Earnings beat for its fiscal second quarter. The Thursday rout alone erased $286 billion in Market Capitalisation, marking the fourth-largest single-day valuation wipeout for any U.S.-listed company on record, according to Dow Jones Market Data.

The guidance disappointment was compounded when CEO Hock Tan acknowledged on the Earnings Call that Google, one of Broadcom's largest custom chip clients, was likely to diversify its Supply chain. For a company whose bull case rests heavily on artificial intelligence infrastructure Demand from hyperscalers, the comment landed poorly with the market.

The contagion spread quickly. Micron Technology (NASDAQ: MU) dropped 3.2% in premarket trading, Advanced Micro Devices (NASDAQ: AMD) slid an equivalent 3.2%, Intel (NASDAQ: INTC) declined 3.1%, and Marvell Technology (NASDAQ: MRVL) fell the sharpest of the group, losing 3.6% before the opening bell.

The broad-based weakness raises a pointed question: is this a short-term reset, or does Broadcom's tepid forward guidance signal something more structural — a cooling of the AI chip euphoria that has powered the PHLX Semiconductor Index (PHLX: SOX) to a remarkable 92% gain in 2026? The index itself slipped more than 2% on Thursday, its sharpest single-session pullback in recent months.

Not everyone is sounding the alarm. Analysts at Barron's argued last week that while the sector's headline gains are unlikely to be sustained at this pace, the highest-quality names retain the fundamental earnings power to outperform the broader market over the medium term. That shortlist includes Nvidia (NASDAQ: NVDA), AMD (NASDAQ: AMD), Broadcom (NASDAQ: AVGO), Taiwan Semiconductor Manufacturing Company (NYSE: TSM), and Micron (NASDAQ: MU) — all companies with direct, scalable exposure to AI compute and data centre buildout.

For now, though, sentiment has shifted. The sector that led markets to record highs is facing its first real test of 2026, and Friday's premarket moves suggest the selling pressure has not yet run its course.