Chip index SOX posts longest losing streak since 2008 as AI worries deepen

The Philadelphia Semiconductor Index endured its most protracted losing streak since the 2008 financial crisis on Friday, as worries surrounding artificial intelligence expenditures, mounting borrowing costs, and wavering tech valuations prompted a widespread decline in chip stocks. The index plunged 3.83% to 11,137.29, extending an eight-day decline to its longest such stretch since October 2008.

It has suffered a 16% drop since its last peak on October 6. All 30 components of the index closed lower on Friday, with major players like Broadcom, Micron Technology, Advanced Micro Devices, Intel, Lam Research, and KLA Technologies suffering declines of around 5%. Arm Holdings saw a decline of approximately 7%. CoreWeave's shares plummeted 12%, marking a 25% loss over the past five sessions, while bond yields on its debt surged past 15%, entering distress territory.

This downturn underscores mounting investor apprehension about the viability of the AI investment surge, especially the debt financing necessary for constructing data centers and augmenting computational capabilities. Unanticipatedly elevated U.S. inflation has exacerbated the pressure by heightening apprehensions about sustained high interest rates, thereby escalating the cost of capital for firms heavily invested in AI infrastructure.

The decline also impacted broader U.S. equity indices, with the Nasdaq Composite falling 2.1% and the S&P 500 dropping 1.1%. The Philadelphia Semiconductor Index had surged more than 60% in 2026 up to early October, driven by an unquenchable demand for AI chips and data-center infrastructure. Signs of trouble emerged in June, intensifying dramatically this week as debt-financing concerns surrounding AI cloud firms such as CoreWeave — which carries an estimated $50 billion in debt — intersected with unexpectedly high U.S. inflation data and revelations that China's CXMT had made headway on advanced memory chip architecture.