AI Stock Selloff Accelerates as Investors Rotate Out of Chip Winners

Dramatic Reversal in the AI Trade Looks Overdone After piling into chip stocks and so-called AI winners, investors are now rushing to cut this exposure and rebalance portfolios. Even allowing for that, an acceleration of the selloff in recent days over China competitive risks looks premature. The reversal in the artificial intelligence trade this month has been severe. A UBS Group AG basket of shares geared to AI spending, including semiconductors, is trailing one of stocks deemed at risk of AI disruption by a record 42 percentage points. While the dramatic turnaround follows months of outperformance, it illustrates a sudden unwind of excessive positioning, especially within the chip sector.