Semiconductor Stocks Plummet Amid Tech Sell-Off, Fed Rate Cut Expectations

Several tech and chipmaker stocks, including AMD, Amtech, Broadcom, Marvell Technology, and Semtech, have fallen due to a sell-off in megacap tech and chipmaker shares. The market is awaiting signals from the Federal Reserve's Jackson Hole symposium on future monetary policy. The downturn is attributed to investors taking profits off the table and a significant sell-off in the "AI trade." The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Several tech and chipmaker stocks, including AMD, Amtech, Broadcom, Marvell Technology, and Semtech, experienced significant declines on July 2, 2025, as investors took profits off the table in anticipation of the Federal Reserve's Jackson Hole symposium. The market awaits signals on future monetary policy, which could influence the tech sector's performance. The sell-off was largely attributed to a significant drop in megacap tech and chipmaker shares, with Nvidia, Advanced Micro Devices (AMD), and Broadcom being notable examples [1].

The downturn in the market was exacerbated by a focus on the "AI trade," which includes large technology and semiconductor companies. Investors, seeking to secure gains, sold shares before more definitive feedback from the Federal Reserve. This trend is not uncommon, as the stock market often overreacts to news, presenting potential opportunities for investors to buy high-quality stocks at lower prices [1].

Among the affected stocks, AMD (NASDAQ: AMD) fell by 5.5%, Amtech (NASDAQ: ASYS) by 8.5%, Broadcom (NASDAQ: AVGO) by 4.3%, Marvell Technology (NASDAQ: MRVL) by 5.6%, and Semtech (NASDAQ: SMTC) by 4.3% [1]. These drops come amidst broader market volatility, with other major tech-related companies like Tesla, Meta Platforms, and Netflix also under pressure.

Marvell Technology (MRVL) has seen notable recent developments, including a 25% price increase over the last quarter, driven by a strategic partnership expansion with Microsoft. This partnership involves providing LiquidSecurity HSMs for Microsoft Azure Cloud HSM services, which could have significant implications for Marvell's future revenue and earnings forecasts [2]. The company's expansion in cloud security aligns with its goal to capture a larger share of the rapidly growing AI and data center markets. Analysts anticipate a 16.4% annual growth in revenue over the next few years, with a revenue target of $11.8 billion by 2028 [2].

The market's focus on the Federal Reserve's Jackson Hole symposium is expected to shape investor sentiment and stock performance. The symposium, which kicks off on Thursday, will see Federal Reserve Chair Jerome Powell unveil the Fed's new policy framework and potentially drop hints about the Fed's thinking ahead of its September policy meeting [3]. Market participants are closely monitoring the event, with bond markets and interest-rate swaps indicating a high probability of a rate cut next month [3].

Investors should remain vigilant and consider the potential implications of the Federal Reserve's policy decisions on their portfolios. The market's overreaction to news and the potential for big price drops can present opportunities for investors to buy high-quality stocks at lower prices. However, it is essential to conduct thorough research and consider both the short-term market volatility and the long-term growth prospects of the companies in question.

References:
[1] https://uk.finance.yahoo.com/news/amd-amtech-broadcom-marvell-technology-195047274.html
[2] https://finance.yahoo.com/news/marvell-technology-mrvl-expands-cloud-171831900.html
[3] https://www.investmentnews.com/equities/wall-street-holds-its-breath-before-jackson-hole/261761