Micron Leads Chip Selloff as Three Warning Signs Spook Investors

Shares of Micron and a group of other chipmakers slid sharply on Thursday as investors reacted to three separate pieces of bad news that together shook confidence in the artificial intelligence trade.

The first came from Tesla, which lowered its spending target. Large corporate buyers of computing hardware are a major source of demand for chips, so any sign that a high-profile spender plans to pull back tends to ripple across the sector quickly.

The second was a weaker-than-expected forecast from Lam Research, a company that makes the equipment chipmakers use to build their products. Outlooks from equipment suppliers are closely watched because they offer an early read on how much the industry plans to spend on new capacity. A soft forecast suggested the build-out may not be as strong as the market had assumed.

The third worry was broader. A fresh reminder that the AI boom leans heavily on outside money, from debt markets, private investors and business partners, made some traders question how durable the spending is if financing becomes harder to get or sentiment cools.

Taken together, the moves show how fast confidence can turn for a sector that has run on high expectations. Investors will be watching upcoming earnings and capital spending updates from chipmakers and their customers to decide whether Thursday's drop was a one-day reaction or the start of a wider reassessment.