How much did the SMH ETF decline this week?

The iShares PHLX Semiconductor Sector Index ETF (SMH) fell nearly 7% for the week.

Did this decline affect broader U.S. stocks?

Yes, the drop in chip stocks dragged U.S. stock futures lower.

Global Chip Stocks Tumble as AI Spending Doubts Mount

Global chip stocks tumbled, with the iShares PHLX Semiconductor Sector Index ETF (SMH) falling nearly 7% for the week, as investors grow skeptical about the sustainability of heavy AI spending. The decline pulled U.S. stock futures lower.

July 17, 2026

2 min read

Source: Quartz

Key Numbers

SMH weekly decline

~7%

Global semiconductor stocks experienced a sharp decline this week, with the iShares PHLX Semiconductor Sector Index ETF (SMH) dropping nearly 7%, as investors question whether massive spending on artificial intelligence infrastructure will yield expected returns. This sell-off dragged U.S. stock futures lower.

Possible Causes

The decline stems from growing investor concern that the heavy capital expenditure on AI infrastructure may not generate sufficient returns, especially amid slowing revenue growth at some major tech firms. Recent executive comments about needing to "prove ROI" have added to the pressure.

Context

Over the past month, the chip sector had rallied strongly on AI optimism. The current drop erases some of those gains. Stocks including NVIDIA (NVDA), Intel (INTC), Applied Materials (AMAT), Lam Research (LRCX), KLA Corporation (KLAC), and Micron Technology (MU) were all affected.

Similar Moves in the Sector

This decline is not isolated; European and Asian chip stocks also saw comparable losses, indicating a global sell-off in the sector. It follows a period of record highs driven by AI demand expectations.

Frequently Asked Questions

Chip stocks fell due to investor concerns that heavy AI spending may not be sustainable or yield expected returns.

Found this useful? Share it

This article was rewritten in Wrqti's editorial style based on information from the original source above. Content is informational only — not investment advice.