AI stocks fall as Broadcom and Nvidia crash

Gotrade News – AI stocks tumble after better-than-expected US jobs report triggers market-wide selloff. In this session, the S&P 500 was down 2.6%, the Nasdaq was down 4.2%, and the Dow was down 1.3%.

The decline reignited fears of a valuation bubble across the AI ​​sector, which has heated up in recent months. Investors began to question whether blockbuster tech prices still made sense amid rising interest rate concerns.

Important points

• Broadcom (AVGO) fell 7.49% and Nvidia (NVDA) fell 5.93% as AI stocks tumbled.
• Concerns that the Federal Reserve will raise interest rates have increased after strong U.S. employment data.
• The sell-off spread to Asia, with South Korea’s Kospi plummeting 9%.

Broadcom (AVGO) fell $31.39, or 7.49%, to close at $387.52 on June 5, 2026, according to The Motley Fool. Although the company’s earnings have remained strong, the decline in stock prices has put the company’s profit margins in the spotlight.

Nvidia (NVDA) stock also took a big hit, dropping 5.93% to $205.70 during the same session. Nvidia’s valuation is now nearing $5 trillion, a level that has many investors worried.

According to The Motley Fool, the immediate trigger was the much better-than-expected U.S. jobs report. Such strong data makes it more likely that the Fed will keep interest rates high for an extended period of time.

Pressure spreads to Asia

As Investing.com reported, the wave of selling also hit Asian markets as the AI ​​trade unwinded. South Korea’s Kospi index plunged 9% on tough trading in technology stocks.

SK Hynix’s stock price fell 4.1%, while Samsung Electronics’ stock fell 7.8%, according to Investing.com data. Negative sentiment worsened as strong U.S. employment data heightened concerns about global interest rate hikes.

The 9% drop in the Kospi reflects South Korea’s heavy dependence on chip and technology exports. Memory chip makers tend to be most exposed to sharp corrections when demand for AI is called into question.

Tech giants like Amazon, Alphabet, and Microsoft are currently developing their own AI chips. The changes will further increase competitive pressure on existing chip suppliers at a time when valuations are already soaring.

The decline highlighted how tightly global markets are tied to a single AI trade theme. As Wall Street sentiment reversed, Asian markets were dragged down within just a few hours.

The VanEck Semiconductor ETF (SMH), the flagship basket of semiconductor stocks, now has broader sector exposure. Funds also fell as nearly all major chip names weakened in unison during the session.

Broadcom’s attention is currently focused on its profit margins, even as the company’s revenue remains strong. As competition for custom chips intensifies, investors worry that rising costs could hurt profitability.

Additional pressure came from Nvidia’s valuation, which was approaching $5 trillion just before this sharp correction. With such a large number, there is little room for error when market sentiment changes rapidly.

In fact, some analysts see a sharp pullback as a generational buying opportunity, provided fundamentals hold. But until the Fed’s interest rate path becomes clearer, the risks remain real.

source of information