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The Philadelphia semiconductor index, known as SOX, plunged 7.8% on the stock market today. The SOX includes the 30 largest semiconductor stocks traded in the U.S.

AI chip powerhouse Nvidia continued its post-earnings report slide. Nvidia stock fell 9.5% to close at 108. Nvidia lost $279 billion in market capitalization, a major indication that investors are becoming more cautious about emerging AI technology that has fueled much of this year's stock market gains.

Fellow AI chip producers also retreated. Advanced Micro Devices (AMD) dropped 7.8% to 136.94. Broadcom (AVGO) slid 6.2% to 152.79. And Marvell Technology (MRVL) sank 8.2% to 70.02.

● Other Top Semiconductor Stocks Knocked Down

Chip designer Arm Holdings (ARM) declined 6.9% to 123.74. Wireless-chip leader Qualcomm (QCOM) pulled back 6.9% to 163.24.

Two semiconductor stocks on the IBD 50 list of elite stocks also took a hit. U.S. shares of chip foundry Taiwan Semiconductor Manufacturing (TSM) fell 6.5% to 160.49. And audio-chip vendor Cirrus Logic (CRUS) dropped 5.6% to 137.47.

Other major chip manufacturers getting a haircut on September 3 included Texas Instruments (TXN) and Analog Devices (ADI). TI stock sank 5.8% to 201.83. ADI stock declined 6.5% to 218.71.

Memory-chip leader Micron Technology (MU) saw its shares fall 8% to 88.58.

● Downbeat Reports Weigh On Chip Stocks

Semiconductor stocks reacted negatively to several reports.

First, data out Saturday showed that China's factory activity contracted for a fourth straight month in August. The news is the latest sign that the world's second-largest economy may struggle to meet its growth target for the year.

Second, the Semiconductor Industry Association on Tuesday reported below-seasonal chip sales for the month of July.

UBS analyst Timothy Arcuri said the 11.1% drop in chip sales from June to July was below the 5-year and 10-year averages.

"Memory was the main downside driver," Arcuri said in a client note. "Key segments including MCU (microcontroller unit), DSP (digital signal processor) and analog posted declines that were worse than their respective seasonal trends over both the past five and 10 years."

Editor：Vicky

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