Nvidia, Qualcomm lead chips lower amid broader tech sell off

Semiconductor stocks were mostly lower on Wednesday amid a broader decline in technology stocks, due in part to negative investor reaction towards earnings from Google (NASDAQ:GOOG) (GOOGL) and Tesla (NASDAQ:TSLA).

Leading the sector lower were companies like Qualcomm (NASDAQ:QCOM), Broadcom (AVGO) and Nvidia (NASDAQ:NVDA), each of which fell 3% or more.

The downturn in Nvidia may be related to Tesla Chief Executive Elon Musk telling investors that the company’s upcoming Dojo supercomputer may be competitive with Nvidia’s offerings.

“I should preface this by saying I’m incredibly impressed by NVIDIA’s execution and the capability of their hardware,” Musk said on the company’s second-quarter earnings call. “And what we are seeing is that the demand for NVIDIA hardware is so high that it’s often difficult to get the GPUs. … I guess I’m quite concerned about actually being able to get state-of-the-art NVIDIA GPUs when we want them. And I think this therefore requires that we put a lot more effort on Dojo in order to have — in order to ensure that we’ve got the training capability that we need. So we are going to double down on Dojo, and we do see a path to being competitive with NVIDIA with Dojo.”

AMD (AMD), which often trades in tandem with Nvidia, fell 2.8% in morning trading.

Qualcomm fell for a second straight day after Baird increased its price target on the San Diego chipmaker on Tuesday and added it to its top picks list. Qualcomm shares have gained more than 31% year-to-date, but are down slightly more than 8% over the past month.

Additionally, TF International Securities analyst Ming-Chi Kuo said that Apple (AAPL) is “accelerating” its move to be less reliant on Qualcomm. Kuo said Apple could “ditch” Qualcomm’s 5G chips in favor of its own for the iPhone SE4 and the iPhone 17, slated to be released in the first and third quarters of 2025, respectively.

Texas Instruments (TXN) bucked the sell-off and rose roughly 1% after the analog chip supplier offered up guidance that suggested the downturn is over.

“As we highlighted last quarter, we think that we have passed the bottom for analog, for both TXN and the industry,” Morgan Stanley analyst Joseph Moore wrote in an investor note. “For the second quarter in a row, TI guided for normal seasonality, looking for 7% growth in 3q – normal, at least, in pre-Covid times. Automotive and industrial were down q/q in 2q, while the end market contribution of 3q is unclear, but the company highlighted that there are still pockets of excess inventory in some portions of the automotive and industrial markets.”

Analog Devices (ADI) and NXP Semiconductors (NXPI), which compete with Texas Instruments in the analog space, fell 1.2% and 0.6%, respectively. NXP reported its own quarterly results earlier in the week.

Tower Semiconductor (TSEM) was another chip stock to buck the sell-off on Wednesday after the semiconductor manufacturer reported second-quarter results that topped estimates. Shares rose 2% in morning trading.

Silicon Laboratories (SLAB) also rose more than 2% after it too reported quarterly results that topped estimates.

Apple (AAPL) suppliers, including Skyworks Solutions (SWKS) and Qorvo (QRVO) fell even as Barclays raised its estimates on the tech giant, as it raised earnings estimates on the tech giant due to improvements in the iPhone, Mac and services.

Sony (SONY) shares fell after TF International Securities’ Kuo said Apple could replace Sony’s image sensor with one from Samsung (OTCPK:SSNLF) in the 2026 version of the iPhone.

Most other semiconductor stocks were lower on Wednesday, including Micron (MU), On Semiconductor (ON) and Microchip (MCHP), among others.

(This story has been updated to include added comments on Qualcomm and Apple.)