Thursday, July 2, proved a damaging day for some of the top chipmakers involved with the artificial intelligence (AI) boom in terms of their stock market performance and valuation.
Indeed, the three biggest semiconductor companies in the world, Nvidia (NASDAQ: NVDA), Advanced Micro Devices (NASDAQ: AMD), and Intel (NASDAQ: INTC), saw a combined $137 billion wiped from their market capitalization during the day’s regular session.
INTC stock saw the largest relative drop, falling 5.25% to $120.35 and seeing its valuation drop by roughly $33.5 billion. AMD fared only slightly better, dropping by $37.6 billion to $844 billion after a 4.26% stock market fall to $517.82.
Nvidia, the largest company in the world, saw only a slight, 1.39% correction to $194.83, though its size ensured the fall translated to a $66 billion market capitalization drop to $4.7 trillion.
Notably, however, NVDA shares are 9.28% down in the monthly chart in stark contrast with AMD equity that fell a far smaller 4.55% and INTC stock that rose 6.78% within the same timeframe.
Why top AI semiconductor stocks crashed on Thursday
Elsewhere, the bloodbath appears to have been primarily triggered by reports that Meta Platforms (NASDAQ: META) is preparing to begin renting out its excess AI capacity.
Though the news was initially welcome and saw the stock of Mark Zuckerberg’s company soar approximately 10% on July 1, investors and the media soon began to question the implications for the wider technological boom.
At surface level, the sudden introduction of Meta’s likely vast capacity would shift the balance between supply and demand, likely driving prices of critical hardware such as GPUs and CPUs lower.
More worryingly, the alleged decision raises questions about the narrative surrounding AI data centers and the need for additional – and even existing – capacity.
Earlier in 2026, Google’s parent company Alphabet (NASDAQ: GOOGL) claimed its artificial intelligence cloud growth was primarily limited by capacity – a statement that simultaneously implied that, once the delays and other issues with gigawatt construction are resolved, big tech revenue would skyrocket.
With SpaceX (NASDAQ: SPCX) – a company running its own AI thanks to the integration of xAI – already renting out capacity to both Anthropic and Google, and with Meta joining the fray, it is reasonable to question whether the hardware that already exists is sufficient to meet actual demand while providing enough headroom to find tenants.
The question was made more destabilizing for the boom narrative by the aforementioned issues with construction, the June debate over the costs and benefits of adoption, and the growing public dissatisfaction.
Wall Street remains bullish on Meta stock and the AI boom
Simultaneously, it is important to note that much of Wall Street appears to have taken a decisively bullish stance toward Meta’s alleged decision to rent out access capacity.
Specifically, a vast majority of institutional analysts’ stock rating and price target revisions for Meta shares that were issued on July 1 and 2 were optimistic and accompanied by ‘Buy’ recommendations.
Furthermore, even some of the ‘Neutral’ rankings came with predicted 12-month upsides, and ‘Sell’ ratings were absent for Meta stock in the first two days of the month.
Similarly, the popular TV host and former hedge fund manager Jim Cramer repeatedly took to X to voice his disbelief in how small the blue-chip social media giant’s rally ended up being and opined that the news is worth at least a $100 move.
Thursday bloodbath extended beyond AI semiconductor stocks
Lastly, given the array of technology subsectors involved in the AI boom, it should come as no surprise that semiconductors were far from the only ones to suffer the downturn.
SanDisk (NASDAQ: SNDK) and Western Digital (NASDAQ: WDC) – two prominent storage stocks – wiped a total of $63 billion, with the former falling 14% and the latter just under 10% during the July 2 session.
The memory giant Micron (NASDAQ: MU) – a firm that famously abandoned the consumer market in favor of corporate AI-involved clients in late 2025 – erased $64 billion from its market capitalization with a 5.49% daily fall.
Marvell Technology (NASDAQ: MRVL), a firm that came into prominence in early June when the Nvidia CEO opined it is the next $1 trillion company, fell 9.84% and saw its valuation drop by roughly $23.5 billion.
Overall, reports regarding Meta’s decision to rent out its excess capacity appear to have erased nearly $300 billion from some of the biggest names in the AI boom during a single session just ahead of the July 4 celebration.
Featured image via Shutterstock
