The market capitalization of global chip manufacturers has fallen by more than $500 billion, triggered by the AI bubble and high valuations leading to a selling spree.

Jin10 data reported on November 5, global chip manufacturers' market capitalization has significantly declined, as investors' concerns over the high valuations of tech stocks have deepened. The wave of selling has led to the evaporation of about $500 billion in market capitalization for the Philadelphia semiconductor index on Tuesday and the index tracking Asian chip stocks on Wednesday. This big dump highlights that the gains of semiconductor stocks driven by the AI boom have been extremely overstretched. Since the low point in April, as investors bet on a surge in AI computing demand, chip manufacturers' market capitalization has increased by trillions of dollars. The current pullback reflects the market's growing concerns about the industry's profit outlook and excessive valuations, especially against the backdrop of interest rates potentially being “higher for longer.” Chris Weston, head of research at Pepperstone Group, stated: “The entire market is a 'sea of blood,' presenting a gloomy and dreary risk landscape. We must remain open-minded and acknowledge that this adjustment may further expand. Currently, there is almost no reason to buy.”