New York, June 11, 2026, 06:45 EDT
- The PHLX Semiconductor Index dropped 3.57% on Wednesday to 12,206.46. Nvidia and Broadcom were two of the biggest weights on the S&P 500.
- Oracle’s results after the bell turned some AI optimism into new doubts about funding, with investors looking at a capital spending plan for fiscal 2027 that Reuters said may go as high as $95 billion.
- TSMC said its May revenue climbed 30.1% from the same month last year, showing chip demand is holding up despite pressure on valuations.
Chip stocks took another hit Thursday as investors kept tallying up what the AI wave is costing. The PHLX Semiconductor Index, or SOX, dropped 3.57% on Wednesday. Oracle’s numbers, out after the bell, only raised more doubts about how much more cash—debt and equity—will be needed to fund the AI push before chipmakers actually see lasting profits from demand.
The SOX, a modified market-cap-weighted index tracking semiconductor firms that design, make, distribute and sell chips, is seen as a key chip-stock sentiment gauge for Wall Street. Reuters said semiconductor shares kept falling Wednesday, dragging out recent losses. Nvidia and Broadcom were among the biggest weights on the S&P 500, with tech valuations a concern for investors.
Oracle doesn’t make chips, but its latest report hit the semiconductor sector hard since its cloud data centers are big buyers of high-end AI hardware. The company said remaining performance obligations, or RPO, jumped to $638 billion, up 363% from a year ago. Oracle said a big part of the jump came from AI contracts linked to graphics processing units, the chips that handle AI training and inference.
Oracle’s latest numbers gave bulls enough to stay in. The company said fiscal fourth-quarter total revenue was $19.2 billion, up 21%. Cloud infrastructure revenue was up 93% to $5.8 billion. For fiscal 2026, Oracle posted a 77% increase in cloud infrastructure revenue, hitting $18.1 billion.
Oracle shares fell as the company’s numbers on funding spooked investors. Reuters said Oracle is projecting up to $95 billion in capital spending for fiscal 2027, up from $55.66 billion in 2026, on data centers, servers, and network equipment. The company also expects to raise about $40 billion in new debt and equity next year, which includes $20 billion from a previously announced at-the-market program.
Oracle tumbled 8.9% after hours following its report, Reuters said. Jacob Bourne at eMarketer said, “The demand is real with cloud infrastructure revenue and backlog growing fast. But the funding question is getting harder, not easier.” Reuters
The worry landed in a market still hurt from Broadcom. Last week, Broadcom reported revenue for the quarter a little under what Wall Street wanted, and its forecast for AI chip revenue this quarter was $16 billion, shy of the $16.36 billion analysts had in mind, according to Reuters. Investors weren’t upset that AI demand disappeared. The issue was the stock had been priced to deliver more and didn’t.
Broadcom said AI chip revenue jumped 143% from a year ago to $10.8 billion in its fiscal Q2 and expects about $16 billion from AI chips in fiscal Q3. That’s a fast-growing end market, but hopes have grown even faster. For chip investors, that’s the challenge.
Taiwan Semiconductor Manufacturing Co. helped offset weakness elsewhere. TSMC said May revenue was NT$416.98 billion, up 30.1% on the year. Revenue for the first five months of 2026 rose 30.0%. The numbers suggest demand for advanced chips is holding up, despite selling in U.S.-listed semiconductor and AI stocks.
Funding concerns loomed larger as the market backdrop worsened. Reuters said U.S. indexes lost more than 1% on Wednesday, pulled down by weaker tech names, with sticky inflation keeping traders focused on rates. Fresh U.S.-Iran tensions gave investors another reason to cut risk. Higher rates tend to pressure growth stocks since their value depends more on future earnings than on cash flow today.
The risk isn’t just about chip demand dropping all at once. Rising financing costs, slower customer payments, or headaches building data centers—like issues with power, permits, or local pushback—could force buyers of AI chips to slow projects. A Reuters/Ipsos poll out Thursday showed 57% of Americans don’t want a data center in their area and 77% are concerned AI-fueled data centers would push up their electricity bills.
Oracle’s first-quarter outlook and funding update are the next things to watch. The company is guiding for total cloud revenue growth between 58% and 64% in U.S. dollars for fiscal Q1 2027. But for the semiconductor rally, it’s now about whether customer prepayments, reimbursements and debt markets can meet the demands of the current build-out.
