TL;DR

More than $1 trillion gone in a single day

The semiconductor sector experienced one of its most severe single-day sell-offs in recent memory on Thursday. According to Seeking Alpha, more than $1 trillion in combined market value was erased in a matter of hours, as broad-based panic gripped chip stocks worldwide.

The crash came during a period of pronounced risk aversion in the markets — the crypto market's Fear & Greed Index is signaling extreme fear with a reading of 12 out of 100, and Bitcoin is trading around $60,693.

Chip crash wipes out $1 trillion: Nvidia and Broadcom in free fall - Bilde 1

Broadcom triggered the sell-off

The catalyst was Broadcom's sharp share price decline following the company's latest quarterly earnings report. Despite solid earnings growth, investors reacted negatively to the company's forward guidance on AI revenues. Concerns centered on potential margin pressure from the company's increased exposure to custom AI chips, as well as the risk that major customers could diversify their supplier relationships.

The stock fell as much as 15.4% in after-hours trading, representing a market value loss of more than $300 billion from Broadcom alone, according to data cited by Seeking Alpha.

Broadcom lost more than $300 billion in market value in a single evening — just one of many dominoes to fall in the sector-wide crash.

The contagion spread across the entire sector

The selling pressure quickly spread to other chip companies. Nvidia, which in recent years has been the clear winner of the AI boom — with a data center division that reported revenues of $75.2 billion in the most recent quarter (Q1 FY2027), up 92% year over year — was dragged down in the slipstream. Micron Technology, Intel, AMD, and Qualcomm also ended the session with significant losses.

-15.4%
Broadcom's after-hours share price decline
+$300B
Market value erased from Broadcom alone

Jobs report poured fuel on the fire

In addition to company-specific concerns, markets also had a macroeconomic shock to digest. A stronger-than-expected U.S. labor market report sparked fresh fears that the Federal Reserve may be forced to keep interest rates higher for longer than markets had priced in. Higher interest rates are historically negative for highly valued growth sectors such as semiconductors, where future earnings expectations make up a large portion of today's share price.

Nvidia: From crypto mining to AI giant

Nvidia's journey illustrates the semiconductor sector's dramatic swings. The company earned $550 million from crypto mining-specific chips in fiscal year 2022, but when Ethereum transitioned to proof-of-stake in September of that year, that market collapsed. Gaming revenues subsequently fell 51%. Instead, AI became the new growth engine — with total revenue of $81.62 billion in Q1 FY2027.

It is precisely this enormous growth that has made Nvidia one of the world's most valuable companies, but it has also created an expectations burden that can backfire sharply when market sentiment turns.

What happens next?

Analysts will now be watching closely to determine whether the sector crash is a short-lived correction or a signal that investors are beginning to question the AI narrative that has driven semiconductor stocks to record levels. With a macro backdrop defined by interest rate uncertainty and a market in pronounced risk-off mode, the pressure could persist well into the summer months.

For the Oslo Stock Exchange, direct exposure to the semiconductor sector is limited, but global risk sentiment quickly filters through into oil services and technology-heavy portfolios.