Tech stocks tank on Wall Street. Is the chip bubble finally popping?

On June 23, Wall Street tech stocks suffered a heavy blow, with AI chip leaders Nvidia, Micron, and Qualcomm leading the decline. Nvidia's stock price fell more than 5% in a single day, while Micron and Qualcomm dropped over 3%. This downturn is not an isolated event but part of the ongoing volatility in the AI sector since late 2025.

Market sentiment took a sharp turn, with some investors beginning to question the return cycle of AI investments. Previously, AI chip stocks had surged due to demand for large model training and inference, pushing valuations to historical highs. The current decline is seen as a concentrated release of profit-taking and valuation correction.

Despite the stock price crash, most analysts believe this is not a bubble burst. Citing analyst views, Fast Company notes that the current decline is more like the market digesting overly optimistic expectations from earlier periods. Nvidia's P/E ratio remains above the industry average but has fallen from its peak, and fundamentals have not deteriorated.

However, some voices warn that AI chip demand may face short-term bottlenecks. Some cloud service providers have begun developing their own chips, potentially reducing reliance on suppliers like Nvidia. Additionally, geopolitical risks and uncertainties surrounding U.S. export controls add variables to chip stocks.

Despite short-term volatility, the long-term demand logic for AI chips remains solid. Large model training and inference require massive computing power, and chips are the core infrastructure. But the market is shifting from 'buy everything AI' to 'select winners,' with investors focusing more on actual revenue and profit growth.

This downturn may prompt chip companies to accelerate product iteration and customer diversification. For Nvidia, the shipment progress and customer acceptance of its Blackwell architecture chips will be key variables for the next phase of stock performance.