Nvidia, Broadcom, Micron stocks crash: Why are tech shares down today?

Nvidia, Broadcom and Micron Technology fell between 2.1 per cent and 4 per cent in premarket trading on Wednesday, with losses rising again after a brief rebound on ​Monday.

Volatility has picked up across stock markets in recent days, as investors contend with ‌a widening array ⁠of risks, including ⁠high valuations in the tech sector, escalating tensions in the Middle East and expectations that the Federal Reserve may need to hike interest rates to ​curb inflation.

"The tech sector is coming under pressure from a combination of higher rate expectations, which lowers the current value of more distant profits, and ​anxiety over elevated valuations and uncertainties over the monetization of AI," said Mark Haefele, chief ⁠investment officer ‌at UBS Global Wealth Management.


"Investors' positioning in parts of the sector may have also become ​extended after a strong ​rally."

The rotation out of highly subscribed technology shares has aided other areas of the markets ⁠that have lagged this year, including healthcare, real estate and consumer staples.

The much-hyped $1.75 trillion listing of SpaceX on Friday, targeting a record $75 billion raise, could also pressure U.S. stocks as concerns mount over excessive optimism in the tech sector.

Among other movers, Super Micro Computer tumbled 11.1 per cent after announcing plans to raise $7 billion through a series of equity and equity-linked financing transactions to fund component purchases for its growing AI server demand.

Nike's shares were down 1.5 per cent after RBC downgraded the stock's rating to "sector perform" from "outperform".