Chip Index Falls for 8 Straight Sessions Amid AI Financing Concerns

Key Facts

The Philadelphia Semiconductor Index extended its losing streak to 8 consecutive sessions by the close of trading on Friday, October 16, 2026, its longest run of declines since October 2008, according to Investing.com. The decline coincided with concerns over financing for artificial intelligence infrastructure and the sustainability of spending on it, in a sector that supplies chips for these projects. Friday's losses encompassed all 30 companies in the index, broadening the selloff across its components during the session. In the broader U.S. market, the S&P 500 fell 1.1%, while the Nasdaq Composite declined 2.1%, according to the Associated Press. Both indexes ended the week with their worst weekly performance since June, as semiconductor losses continued.

In credit markets, CoreWeave bonds sold off during trading on Wednesday, October 14, with the decline extending into the following day, according to a report published by Axios on Thursday. The selloff pushed the company's bond yields above 15%, amid concerns over financing for AI infrastructure. On Thursday, the cost of 5-year credit default swaps on the company approached 1,100 basis points, according to another report by the outlet. Axios described the contracts, which are used to protect against credit defaults, as "a form of insurance," as the cost of that protection on CoreWeave's debt rose. The losses extended to the company's shares, which fell about 12% on Friday, bringing their cumulative decline to about 25% over 5 sessions, according to Investing.com.

The pressure on CoreWeave's debt and shares followed the company's announcement of revenue of $2,575 million in the second quarter of 2026, according to its earnings release. Revenue in the corresponding period of 2025 was about $1,212 million, the year-earlier comparison the company provided in its quarterly results. On financing costs, CoreWeave reported net interest expense of $640 million in the second quarter of 2026, according to the same release. The company also said its future contracted revenue stood at about $104 billion at the end of June 2026, alongside revenue recognized during the period. The company had also announced in August the closing of a $2.6 billion delayed-draw term loan facility to finance the expansion of its platform.

According to CoreWeave's financing announcement, the facility was priced at the Secured Overnight Financing Rate plus a margin of 5.50 percentage points. The company said the facility received a Ba2 rating from Moody's and a BB+ rating from Fitch. On chip suppliers' equity valuations, Benzinga cited Bank of America as saying Nvidia, Broadcom and Micron were trading at an average of about 13 times forward earnings. The estimate appeared in a note on Friday, October 16, by analyst Vivek Arya, who compared the companies' multiples with Cisco's valuation after the bubble burst. Arya's comparison focused on the companies' forward earnings valuations, against the backdrop of the sector's selloff and concerns surrounding AI spending.

The selloff also extended to the iShares Semiconductor ETF, which trades under the ticker SOXX, according to Investing.com's coverage during Friday's trading. The outlet said the fund's shares were falling and heading for a ninth consecutive losing session during trading on October 16. The fund seeks to track the investment results of the NYSE Semiconductor Index, according to its iShares prospectus. Its annual management fee is 0.33%, according to the prospectus, which specifies the fund's benchmark index and management costs. SOXX shares were thus heading for a ninth losing session during trading as the Philadelphia index posted an 8-session losing streak, with all its components declining on Friday.

On the upcoming calendar, the Federal Reserve holds its next Federal Open Market Committee meeting on October 27 and 28, 2026, according to the U.S. central bank's official calendar. The meeting comes after the selloff that left the S&P 500 and Nasdaq with their worst week since June. In a separate action concerning SOXX shares, the iShares board of trustees approved a 3-for-1 share split, according to the fund's prospectus. iShares set November 5, 2026, as the date for shares to begin trading on a split-adjusted basis. The committee's October meeting precedes the November trading adjustment, among the central bank's and the fund's upcoming official dates.