Semiconductor Stocks Slump Amid U.S.-Iran Tensions and AI Spending Concerns

Nvidia and other major semiconductor stocks fell on Tuesday as renewed uncertainty around U.S.-Iran negotiations pressured the broader market. The company's shares dipped about 2% after committing more than $100 billion in credit support for an OpenAI data center project in Ohio.

Advanced Micro Devices declined by about 3%, weighed down by reports that Google is working with AMD on a future tensor processing unit, which could alter the competitive landscape for AI chips. Wedbush noted this development could have significant implications for the company's growth prospects.

Micron Technology sank nearly 4% as memory stocks came under pressure. The sector has faced fluctuations as investors reassess AI infrastructure spending and potential returns from large capital commitments. The Nasdaq Composite fell by nearly 1.38%, while the S&P 500 slipped about 0.59%. Alphabet was also affected, with Google shares declining due to the broader market decline.