Over Two-Thirds of Tech Stocks Are in a Correction Right Now
The AI trade is cooling fast. Semis are getting hit hardest as profit-taking follows a massive Q2 run.
The AI euphoria that carried tech stocks to dizzying heights is hitting a wall. More than two-thirds of tech names are now sitting at least 20% below their recent peaks — that's correction territory, and it's spreading fast across the sector.
Semiconductor stocks are taking the worst of it. After a blockbuster second quarter that minted massive gains for chip names riding the AI wave, investors are cashing out. That's the ugly side of a momentum trade: when everyone heads for the exit at once, the selloff can be just as violent as the rally.
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This isn't necessarily a death knell for the AI theme. Pullbacks after parabolic runs are normal, even healthy. But if you've been riding these names without stops, the market is reminding you right now why risk management exists. Two-thirds of a sector in drawdown is not a rotation — it's a reset.
The key question traders are asking: is this a buying dip or the beginning of something uglier? Watch the mega-cap AI enablers closely. If names like the leading chipmakers start breaking key support levels on heavy volume, that's your signal the correction has more room to run. Until then, patience beats panic.
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