$420 Billion Vanishes: ASML’s Stumble Triggers Chip Sector Collapse

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In a shocking turn, ASML’s misstep wiped out a staggering $420 billion in market capitalization for chipmakers worldwide. Over the past three months, ASML has plummeted 35%, with ripple effects shaking the entire semiconductor sector. While some pundits, like CNBC, insist the AI bubble is “contained” to ASML, many are drawing eerie comparisons to the subprime mortgage crisis—where early warnings were also dismissed.

Despite ASML’s weak guidance, Barron’s reports that this isn’t proof of the AI bubble bursting. Yet, the stock’s dramatic reversal and the sector’s slump hint otherwise. Nvidia, for example, approached its high on Monday, only to sharply reverse, signaling a deeper issue. Adding fuel to the fire, ASML CEO Christophe Fouquet warns of a slow chip market recovery extending “well into 2025.”

The signs of a bursting AI bubble are glaring—oversupply of GPUs is already here, and ASML’s error has pulled back the curtain on the fragile reality of Nvidia’s dominance. Investors should brace for more volatility as the semiconductor sector faces what could be a prolonged and painful correction.

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Sources:

https://finance.yahoo.com/video/asml-fueled-sell-off-erases-154037282.html

https://finance.yahoo.com/news/global-chip-stocks-shed-420-025259801.html

https://www.cnbc.com/2024/10/16/asian-chip-stocks-fall-on-asmls-disappointing-forecast-possible-us-export-cap.html







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