Shares in STMicroelectronics fell sharply as soon as trading opened on Milan’s FTSE MIB index, then deepened their losses through the session.
The stock is pricing in yet another sell-off that has engulfed the AI chip sector.
The unwinding, which started once again on Wall Street, spread back to Asian markets and finally to Europe’s exchanges.
STM plunges as the selling hits every AI chip name
Shares in STMicroelectronics, the Franco-Italian semiconductor group, tumbled roughly 6.8%, breaking below the psychological threshold of €53.
The stock confirmed itself as a prominent casualty in Milan of the assault that has been running for days against the big names in high tech, including those specialized in producing the hardware needed to build data centers and to serve the artificial intelligence market. These are precisely the names that, according to some analysts, had by now replaced the Magnificent Seven at the center of the AI trade.
Starting from Wall Street, where Nasdaq futures pointed to nothing good, the unwinding stormed the Tokyo market, sending the Nikkei 225 index down more than 4%.
The heaviest losses hit SoftBank, Tokyo Electron and Advantest, all of which slid about 9%.
It went even worse for Japanese memory-chip maker Kioxia, which collapsed by more than 14% after a federal jury in Texas ordered the company to pay $229 million in damages for infringing a Viasat patent related to computer memory technology.
South Korea’s Kospi index escaped the heavy selling because the Seoul exchange was closed for a holiday, but in the previous session shares of SK Hynix, a company in the spotlight after its recent IPO on the Nasdaq, had slipped more than 11%.
On the Taiwan exchange, the selling struck semiconductor giant TSMC, whose stock lost about 3.6%, while in Hong Kong other tech names such as Tencent, Meituan and Kuaishou suffered, the last of these down 3.3%.
The broad pressure on chip stocks was also reflected in the VanEck Semiconductor ETF, which fell 3.7% in the prior session.
Man Group’s manager: how far is the golden moment for chips fading?
A bubble that everyone sees but that no one wants to exit — is that what AI has become? Yes, according to Sumant Wahi, a portfolio manager specialized in technology stocks at Man Group and author of a note titled “Chips in retreat: the AI trend shifts from a broad rally to a more tactical investment.”
Wahi addressed the question of whether “the golden moment for semiconductors” might be losing steam, noting that “the recent sharp swings in tech stocks suggest that could be the case.”
The reasons may also be fundamental in nature, since “in the memory-device market we are seeing more and more signs of an easing of the supply shortage that has underpinned much of the recent rally, with Chinese producers becoming competitive again.”
As a result, “even the investors most bullish on the chip sector now appear to acknowledge that the token-related pricing power is weakening.”
In Wahi’s words:
«Whether this is end-of-half-year nervousness after an exceptional rally, or something closer to a cycle peak, will depend on what the big tech companies communicate when they report second-quarter results. Either way, the scale of the market moves already tells us two things: how much financial leverage and how much short-term capital had concentrated in these stocks, and how much the market has started to worry about the systemic risk inherent in betting, even on margin, that the AI trend is a one-way street.»
Moreover, “the opportunity set is broadening beyond the AI enablers — the chipmakers — toward the builders and the beneficiaries, that is, the companies building the next layer of tech infrastructure and those that will profit from its use.”
The manager on AI stocks: the classic bubble everyone sees but no one wants to leave
According to the manager, one can therefore argue that the AI trend has “moved from a broad thematic rally to something far more tactical,” with “capital rotating quickly toward the part of the chain under the most pressure, from graphics processors to memory, then to optics and, most recently, to wafer production capacity.”
The reference to a speculative bubble — now affecting chip stocks above all — is thus inevitable:
«As for semiconductors, we believe we are facing the classic bubble that everyone sees but that no one wants to exit. Investors probably recognize the gap between chipmakers’ valuations and the cash flows generated by companies further downstream in the chain. Yet exiting the investment too early risks significant underperformance. This creates a fragile foundation, which partly explains the volatility when sentiment shifts.»
With an investment stance that Wahi says is becoming more tactical, he also advises not to forget that new opportunities could come from the IPOs that various companies — infrastructure builders, hyperscalers and others specialized in AI models — are set to launch over the next 12 months.
Opportunities could therefore emerge precisely in the IPO pipeline, even if “the key question is what happens in the six months after the companies list,” given that, “as in 2000, it is usually not the IPOs that upend the market but the subsequent lock-up expirations, when early investors sell to reinvest in the next cycle.”
STM stock: after a +133% rally since the start of 2026, a 40% drop in Milan over the past month
Meanwhile, it is worth watching what is happening to STMicroelectronics shares, after a 2026 that remains stellar so far, as shown by a rally of +133% year-to-date.
On a 12-month basis the stock is up 87%, while over the past three months its price on Milan’s FTSE MIB had jumped more than 40%.
The reversal is clear when looking at the more recent trend. Over the past month, STM has slid 23%, while in the last five days it has plunged more than 15% on the Milan exchange.
Editor’s note
This article was originally published in Italian on money.it by Laura Naka Antonelli on July 17, 2026 as «Azioni STM affondano a Piazza Affari (-6,8%). Titoli chip AI ancora sotto attacco». It has been translated and adapted for an international audience by the Money.it International desk.
