Chip stock pullback sparks worries about AI rally strength, leveraged trades

July 17 : A brutal week for chip stocks — the same names that fueled this year's blistering market rally — has left investors from Seoul to Silicon Valley asking whether the AI boom became over-leveraged and got ahead of itself.Investors from Asia to Europe pulled back from AI-exposed stocks and so-called momentum names that had powered portfolio returns through much of this year.The Philadelphia SE Semiconductor Index dropped 1.6 per cent on Friday. For the week, it sank about 10 per cent, its largest weekly fall in over a year. The index ended Friday down just over 20 per cent from its late-June all-time high, a move that confirms it has been in a bear market."The pullback reflects profit-taking and rising scrutiny of AI capex sustainability," said Toni Meadows, head of investment at BRI