AI Trade Cools Sharply as 69% of Tech Stocks Drop 20% From Highs

On July 8, broad weakness gripped the AI trade, with 69% of S&P 500 tech stocks now more than 20% below their 52-week highs. The pullback began July 7 after Samsung Electronics posted a 19-fold jump in Q2 operating profit yet tumbled nearly 9%, triggering sharp declines across Asian chip stocks and spreading to U.S. semis. The Philadelphia Semiconductor Index fell 4.7% overnight while the Nikkei 225 dropped over 2%, with Intel, Micron and AMD all posting heavy losses. Analysts view the rotation as a normal post-earnings pause rather than the end of AI demand, though sentiment remains fragile around valuation sustainability.