A sharp selloff in semiconductor stocks, sparked by Broadcom’s weak revenue guidance, spilled into cryptocurrency markets on Friday, pushing Bitcoin lower and weighing heavily on crypto-exposed equities. The ripple effects were felt globally after Broadcom’s AI semiconductor outlook failed to meet elevated investor expectations, triggering a 13% single-day drop that erased $286 billion in market value.
The rout began late Wednesday when Broadcom issued guidance for AI semiconductor revenue of about $16 billion for the current quarter. While that figure represented a 200% jump year-over-year, it fell short of the stretched valuations that had built up during months of unbridled enthusiasm for AI chips. The stock’s plunge quickly spread to other semiconductor names: Advanced Micro Devices fell 2.2%, Micron Technology dropped 2.5%, Nvidia slipped 1.1%, and Taiwan Semiconductor retreated 1.7% in premarket trading.
Asian markets took an even harder hit. South Korea’s KOSPI index plunged as much as 5.7%, prompting the Korea Exchange to trigger a sell-side sidecar that briefly suspended programme trading. Chip giants Samsung Electronics and SK Hynix, the country’s export backbone and dominant force in the high-bandwidth memory (HBM) market crucial for AI, fell more than 5% and nearly 7%, respectively. The selloff highlighted South Korea’s structural dependence on the AI hardware trade, with Goldman Sachs strategists warning that markets tied too tightly to a narrow group of exporters become highly vulnerable to swings in global technology spending.
As the retreat deepened, risk-off sentiment extended to cryptocurrencies. Bitcoin and other digital assets continued a recent decline, dragging down stocks with significant crypto exposure. In premarket trading, Coinbase Global fell about 0.7%, Robinhood Markets dropped a similar margin, and Strategy (formerly MicroStrategy) lost 1.4%. The moves came amid a broader pullback that also put the S&P 500’s nine-week winning streak at risk, with futures indicating a 0.4% drop at the open.
The confluence of a tech-led selloff and crypto weakness underscored how closely digital assets have become correlated with traditional risk assets, particularly those linked to the AI infrastructure boom. Bitcoin’s ongoing selloff, while not directly caused by Broadcom, was exacerbated by the souring market mood and profit-taking after powerful rallies in both equities and cryptocurrencies.
