Chip Selloff Hits Six Days as TSMC Sees Demand Above Supply

Chip stocks have slid for six straight sessions on worries about AI funding, power and overbuilding, even as TSMC says demand still exceeds supply. Credit-market commentary on Nvidia and Oracle adds a debt angle to the debate.

Key points

• Techpinions reports chip stocks fell six straight days, while TSMC reported revenue up 41 percent and expects about 44 percent growth for 2026.
• Japan’s Nikkei fell as Tokyo Electron and Screen Holdings led chip losses on concerns about AI infrastructure spending into 2027.
• A Seeking Alpha piece flags Oracle bond yields near 9%, cash flow deficits and an S&P downgrade.
• Another Seeking Alpha analysis argues Nvidia’s widening credit default swaps are being ignored by equity holders.
• Tesla’s Q3 profit fell 44% to $787 million on flat revenue of $28 billion.

Can the selloff and TSMC’s strong numbers both be right?

According to Techpinions, they can. TSMC sees its customers’ spending plans, not whether that spending will pay off. Strong orders today say little about returns on the data centers they fill. The selloff reflects doubts about funding, power availability and overbuilding, not about current demand.

The pressure showed up in Asia too. The Nikkei slipped as semiconductor names retreated over the sustainability of AI infrastructure spending into 2027. Tokyo Electron and Screen Holdings led the declines, while gains in cybersecurity and IT services stocks limited the broader drop.

Is credit becoming the AI trade’s pressure point?

Two Seeking Alpha pieces, both opinion analysis, focus on debt. The Oracle article says the company faces rising debt, cash flow deficits and an S&P downgrade as it shifts toward AI infrastructure, with bond yields near 9%. Its title frames this as what earnings bulls are missing. The Nvidia article argues that implied default risk is climbing through wider CDS spreads while the stock rises, and that valuation and aggressive cash flow assumptions could challenge returns.

These are single-author views, and the summaries provided do not give the underlying CDS levels or the details of the downgrade, so readers should check primary data. Still, the common thread is that financing costs for AI buildouts are drawing scrutiny alongside equity valuations.

What else moved?

On the bull side, Business Insider reports that Maverick Capital’s co-head said at the closed-door Robin Hood conference that Intel will be the next trillion-dollar semiconductor company and that its earnings will more than double soon. That is one investor’s pitch, not a forecast from the company.

In hardware, Supermicro introduced a Vera CPU rack with 256 Nvidia CPUs and 100% liquid cooling, complementing the Vera Rubin platform for agentic AI. Pricing and availability were not in the provided summary.

Tesla’s results were weak, with net profit down 44% and revenue flat, though cash flow improved. The same report says Elon Musk is exploring a possible Tesla-SpaceX merger. Fortune argues Tesla holders could benefit if paid a premium, while SpaceX holders may fare worse. No terms have been confirmed in these sources.

What should investors watch?

The key question is whether spending plans keep getting funded. TSMC’s guidance supports near-term demand, while credit commentary on Oracle and Nvidia and the Asian chip retreat point to rising doubts about the payoff. Bond spreads, further rating actions and capex guidance are the signals to follow.

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