New York, June 5, 2026, 18:09 (EDT)
Nvidia dropped roughly 6.2% to $205.10 late Friday, losing ground with other chip names. A strong U.S. jobs report and fresh questions about AI-chip demand weighed on one of Wall Street’s busiest trades. The stock was off $13.56 from its last close, according to market data.
Nvidia has been the top signal for investor demand in artificial intelligence spending. The PHLX Semiconductor Index slid 10.3%, its sharpest one-day drop since March 2020, with U.S.-listed chip stocks shedding roughly $1.3 trillion in market value, according to Reuters.
Labor data also weighed on markets. The Labor Department reported U.S. nonfarm payrolls increased 172,000 in May while unemployment stayed at 4.3%. The figures raised worries the Federal Reserve may stick with higher rates for longer. Growth stocks often take a hit from higher rates, since expected future profits lose value.
Nasdaq drops 4.18%, S&P 500 down 2.64% as tech rally stalls
“After the record run we’ve seen the last nine weeks in equities, specifically tech and semiconductors, the dam just broke today,” Ryan Detrick, chief market strategist at Carson Group, told Reuters. The Nasdaq Composite sank 4.18% and the S&P 500 fell 2.64%, snapping a nine-week streak of Friday-to-Friday gains. Reuters
Broadcom stock dropped after its results didn’t match strong hopes for custom AI chips—these are chips set up for one customer’s needs instead of general use. The company works with Alphabet and Meta to build in-house processors, taking on some of Nvidia’s data-center business. Analysts pointed to Broadcom’s steady $100 billion AI revenue forecast for fiscal 2027 as a letdown for investors.
Peers took sharp losses. Broadcom dropped 7.9% to $385.73 and Advanced Micro Devices slid 10.8% to $466.38, according to market data. With both stocks falling, Nvidia’s drop looked less like an isolated issue and more like a sign for the whole sector.
The semiconductor sector looked “way overbought,” according to Ohsung Kwon, chief equity strategist at Wells Fargo. But Kwon said he did not see this as “the end of the semi bull market.” Dennis Dick, proprietary trader at Triple D Trading, said investors had “blindly” bought any dip until Friday. Reuters
Nvidia shares fell even though the company’s latest report showed revenue is still strong. For the fiscal first quarter, Nvidia posted revenue of $81.6 billion, up 85% from the prior year. Data Center brought in $75.2 billion. Nvidia’s outlook for second-quarter revenue is $91.0 billion, give or take 2%. The board signed off on an extra $80 billion for buybacks and bumped up the dividend to 25 cents a share from 1 cent.
Nvidia CEO Jensen Huang was in Seoul on Friday, pushing future demand. He talked up robotics and “physical AI” for South Korean factories and told reporters, “I brought a lot of business for Korea.” Reuters reported Samsung Electronics, SK Hynix and Micron have all been cleared to supply HBM4, the high-bandwidth memory used with AI chips, for Nvidia’s Vera Rubin AI platform. Reuters
Friday’s selloff could be more than just a shakeout. If Broadcom’s weaker AI message means custom-chip orders are slowing, or if higher yields keep hitting expensive growth stocks, Nvidia may have less margin even with robust demand numbers.
Right now, the question is whether buyers return to AI chip stocks after trimming risk this weekend, or if traders want to see cooler inflation before jumping back into Nvidia and similar names.
