Qualcomm Falls 13% as AI Chip Rally Stalls

Qualcomm’s shares dropped 13% to $185.42 on May 14 after reports that major cloud customers were moderating spending on AI infrastructure, regulators increased oversight of large technology firms and the company flagged supply‑chain weaknesses. The decline erased much of Qualcomm’s roughly 25% gain earlier this year tied to AI chip demand.

The sell‑off extended across the semiconductor sector. NVIDIA and AMD each slid about 8% to 10% in the same session. Tokens linked to decentralized AI computing also moved lower: the RNDR token fell about 5% to 7% as of May 10.

Reports that hyperscalers were pulling back on AI infrastructure projects reduced expectations for near‑term demand. Regulatory scrutiny of big technology companies added uncertainty about future investments and partnerships. Qualcomm’s fiscal second‑quarter report, released April 28, beat analyst estimates for revenue and profit but identified vulnerabilities in its supply chain.

On April 20 Qualcomm announced partnerships to develop AI‑enabled automotive chips. Market participants viewed those initiatives as part of the company’s push into new markets, but concerns about exposure to U.S.-China trade tensions and global supply‑chain risks remained.

Analysts noted the sector had rallied about 25% earlier in the year, leaving valuations sensitive to changes in spending plans. When reports of moderated hyperscaler budgets surfaced, investors re‑priced future earnings expectations, producing sharp one‑day declines across multiple chipmakers.

Observers described the pullback in AI‑linked crypto tokens as a correction following heavy investor focus on traditional AI chip suppliers. Analysts said that if hyperscaler spending continues to ease, losses in both equities and related crypto projects could deepen.

Market participants are watching upcoming corporate earnings and public statements from major cloud providers for clearer signals about whether the moderation in spending is temporary or the start of a broader pullback.