Chip Stocks Slide Eight Sessions as AI Funding Costs Rise

The semiconductor selloff stretched into a new week of pressure, with the iShares Semiconductor ETF (SOXX) on its longest losing streak in years. Meanwhile, funding costs for AI infrastructure companies are drawing fresh scrutiny, and some officials and analysts argue demand remains intact.

Key points

• SOXX has fallen for eight consecutive sessions, its longest losing streak per the report, and another outlet describes a historic drop that has rewarded short-sellers.
• A Jefferies report cited by the Economic Times says credit spreads are widening for Oracle and CoreWeave, raising borrowing costs.
• South Korea’s finance minister said chip growth can last at least through 2027 because supply remains tight.
• GF Securities called Nvidia a compelling opportunity despite the downturn, pointing to its networking advances.
• Alphabet shares fell even as an AI-chip forecast pointed to a bigger cloud business.

How serious is the chip selloff?

The signal is unusual. The AI chip trade is showing real signs of strain, with SOXX down eight sessions in a row. A separate report notes the sector had been among the strongest over the past year, and that the reversal has produced significant profits for short-sellers.

The summaries available to us do not give full price levels or the exact drivers, so the size of the drawdown is best checked against live market data. What is clear is that a crowded winner is being sold, and the streak itself has become the story.

Is the demand story still intact?

Officials and analysts say yes. South Korea’s finance minister argued that semiconductor growth can run at least through 2027 as supply remains tight, despite the global sell-off. That is a government view from a major chip-exporting economy, not an independent forecast, but it suggests the physical shortage argument has not changed.

On the company side, GF Securities pointed to Nvidia’s networking progress as a reason to own the stock through the slump. Nvidia’s chief, speaking in Stockholm, said AI will ultimately become a key part of all companies and urged Europe to build up its AI industry. Both are supportive views from interested or sell-side voices, so weigh them accordingly.

Elsewhere, a FedEx report suggests the Philippines could attract more semiconductor investment as manufacturers diversify across Asia-Pacific. That is a supply-chain trend rather than a near-term earnings driver.

Do higher borrowing costs threaten the build-out?

This is the more structural worry. The Jefferies report describes elevated credit risk among AI infrastructure firms, with wider spreads at Oracle and CoreWeave. Funding for AI initiatives is described as steady for now, but a growth slowdown could put pressure on those companies.

An Investing.com analysis frames the same theme, arguing that higher rates are forcing a more selective approach to AI infrastructure and covering Microsoft, Alphabet and Amazon. Alphabet’s case shows the tension. Its AI-chip forecast points to a larger cloud business, but the stock fell, and the report says the harder test is turning those sales into profit.

What else is moving?

SpaceX shares (SPCX) dropped 2.33% to $148.62 on October 15 as a Starlink dispute with Ukraine escalated. Separately, Elon Musk replied “Much appreciated” to a Reliance statement on Starlink’s proposed India entry. Neither item is a direct AI-earnings story.

Anthropic co-founder Jack Clark, at the IMF and World Bank meetings, stressed AI’s transformative potential, with a headline figure of $44 trillion in US GDP growth. The summary is truncated, so the basis for that number is unclear.

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