NEW YORK, Feb 4, 2026, 06:41 ET — Premarket
Advanced Micro Devices dropped roughly 1.5% to $242.11 in early trading Wednesday, dragging other AI chip stocks down with it amid fresh AI news. Nvidia slid 2.8%, Broadcom tumbled 3.3%, and the iShares Semiconductor ETF slipped around 2%.
After a steep selloff Tuesday, software and cloud stocks took a hit amid concerns that AI might pressure profit margins and shake up established business models. “We’re seeing a lot of software companies across the spectrum get hit,” said Art Hogan, chief market strategist at B. Riley Wealth. (Reuters)
Nvidia CEO Jensen Huang pushed back against worries on Wednesday, calling the notion that AI will replace software tools “illogical” during a Cisco-hosted AI event in San Francisco. The sell-off in software stocks, partly triggered by a new chatbot update from Anthropic, also hit Asian markets. (Reuters)
AMD provided a sharper jolt. The firm projects first-quarter revenue around $9.8 billion, with a $300 million margin, falling short of last quarter’s $10.27 billion—even after a late boost from China-bound AI chip sales cleared under a U.S. license. Bernstein analyst Stacy Rasgon remarked that near-term AI figures “are not really inflecting.” (Reuters)
During a conference call, CEO Lisa Su said demand for AMD’s next-gen AI servers — including shipments to OpenAI and others — is expected to pick up in the second half of the year. She also noted that a global memory-chip shortage won’t limit production. Still, the guidance fell short of expectations in a market geared for what TECHnalysis Research’s Bob O’Donnell called “large blowout quarters.” (Reuters)
China is also under the microscope for Nvidia investors. The Financial Times reported that sales of its H200 AI chip to China are stalled, awaiting a U.S. national security review. Reuters couldn’t confirm the story right away. Nvidia and the U.S. State Department didn’t respond to Reuters’ requests for comment outside business hours. (Reuters)
OpenAI’s changing chip demands are adding strain to the AI supply chain. Reuters revealed this week that OpenAI has grown frustrated with the speed of certain Nvidia chips used for “inference”—the process of a model responding to user queries—and is exploring other options. Still, Nvidia remains the backbone of most of OpenAI’s inference operations. After the story broke, CEO Sam Altman praised Nvidia, calling them the makers of “the best AI chips in the world.” (Reuters)
Intel isn’t sitting on the sidelines. CEO Lip-Bu Tan announced plans to develop GPUs for data centers and brought on Qualcomm’s Eric Demmers to spearhead the project. This move clearly targets the space Nvidia has dominated in powering the current AI boom. (Reuters)
The AI trade is growing crowded and pricey, squeezing tolerance for unclear guidance or policy shocks. Those same AI headlines that drive funds into chipmakers can just as quickly trigger outflows once investors question the payoff from all that spending.
The downside is well-known: softer enterprise software demand, sluggish data-center orders, or tighter export controls limiting sales to China. If that scenario unfolds as the market pulls back risk, the entire AI stack could move as a single position.
Investors won’t have long to wait for the next update. Alphabet reports after the closing bell Wednesday, followed by Amazon on Thursday. Attention also turns to ADP’s national employment report at 8:15 a.m. ET, filling the gap left by delayed government data. Direxion’s Jake Behan noted that some traders are pulling back from what’s become a “crowded AI trade.” (Reuters)
