Tech Stocks Fall, Chipmakers Lead Losses Amid AI Spending Concerns

Technology stocks fell on Thursday, with chipmakers Broadcom and Micron Technology leading the losses as investors fled the semiconductor space.

Broadcom shares were down 13% after the company, which designs and makes customized artificial intelligence chips for other technology names, reported weaker-than-expected earnings on Wednesday.

Micron Technology was down more than 6%.

John Vinh, equity research analyst at Keybanc Capital Markets, said the growing pressure on Broadcom and other semiconductor stocks is warranted.

"These stocks have all had very strong runs," Vinh told CNBC's "Squawk Box" on Thursday, pointing to repeated upward revisions, especially on the AI front. Vinh suggested that the Broadcom reversal indicates that market expectations have caught up with the chip sector run.

Elsewhere, ARM Holdings shares fell 6%, Qualcomm sank 3% and Intel fell 2%, while AMD slipped 3%. Marvell Technology shares initially dropped Thursday, but later turned positive.

In a note Thursday, HSBC analysts led by Max Kettner, chief multi-asset strategist, flagged a slide in chip prices, coupled with a slowdown in AI spending and rollout, as among their "biggest worries."

Vinh noted that Broadcom has suffered a degree of share loss within its largest customer, Google, which has started diversifying toward other chip suppliers.

"The near-term pull-back makes sense," Vinh explained, but added he remains optimistic on Broadcom.

Keith Lerner, CIO and chief market strategist at Truist Wealth, said that a sell-off was normal after a strong run, adding that "we're due for a rest."

"We've come a long way. Fundamentals are solid," he said on CNBC's "Closing Bell" on Wednesday.

"Bull market still deserves a benefit of the doubt, but often markets are two steps forward, one step back. We've had three steps forward, so maybe at least a mini step back, or at least some sideways chop," Lerner said.