A fresh burst of selling in chipmakers and artificial-intelligence names dragged U.S. equities into mixed territory Friday, sending the tech-heavy Nasdaq 100 lower while a value-oriented Dow Jones clung to gains near record highs. Investors continued to question whether the industry’s massive AI spending can justify its lofty valuations, leading to a sharp rotation out of hardware and into defensives like software and gold.

Market Performance and Sector Rotation

The S&P 500 was roughly flat at 7,363, up about 0.1%, while the Dow Jones Industrial Average added around 61 points, also up 0.1% to near 51,982. The Nasdaq 100 underperformed, falling 0.6% to about 29,253 as the AI trade wobbled. Gold added 1.3% to around $4,081 an ounce, clawing back some ground despite remaining down roughly 8% for the month.

Technology was the clear laggard, with the chip rout deepening across the complex. The VanEck Semiconductor ETF (NASDAQ: SMH) sank 3.4%, marking the worst-performing industry fund on the screen. By contrast, money rotated into software and defensives: the iShares Expanded Tech-Software Sector ETF (NYSE: IGV) jumped 3.2%, the VanEck Gold Miners ETF (NYSE: GDX) climbed 3.1%, and the iShares Biotechnology ETF (NASDAQ: IBB) gained 2.6%.

Chipmakers and AI Hardware Under Pressure

The epicenter of the selling was ON Semiconductor Corp. (NASDAQ: ON), which cratered 21% after agreeing to acquire Synaptics Inc. (NASDAQ: SYNA) in an all-stock deal valued at roughly $7 billion. The damage spread across chip and AI-hardware names, extending pressure that has built since Broadcom’s recent AI-revenue guidance disappointed.

Optical and AI-networking suppliers Lumentum Holdings Inc. (NASDAQ: LITE) and Corning Inc. (NYSE: GLW) slid 8.4% and 7.8%, respectively, dragged lower in sympathy with the AI-infrastructure unwind. Memory names also stayed under pressure, with Micron Technology Inc. (NASDAQ: MU) reversing part of Thursday’s earnings-driven surge as worries built that AI infrastructure spending could slow. Western Digital Corp. (NASDAQ: WDC) fell 10.3%.

Oil Prices Tumble

West Texas Intermediate crude tumbled 4.7% to around $68.55 a barrel, leaving the U.S. benchmark down nearly 23% for the month. This marks the worst monthly performance since March 2020 as traders look past the Hormuz headlines toward signs OPEC is restoring Iraq’s pre-war production allocations.

Health care led the rebound, powered by Moderna Inc. (NASDAQ: MRNA), which surged 13.8% – the day’s biggest gainer – after its annual Science Day presentation detailed a broadening pipeline of mRNA therapies extending well beyond vaccines into oncology and rare diseases. AST SpaceMobile Inc. (NASDAQ: ASTS) climbed 9.7% amid continued optimism around its Japan regulatory clearance and an upcoming satellite launch.

Global equities have recovered significantly since the sharp selloff triggered by the pandemic in early 2020, with the Nasdaq 100 climbing more than 200% from its February 2020 level. However, a distinct group of 10 mega-cap companies, each still valued above $100 billion, are trading below their pre-Covid prices. This performance gap underscores the impact of sector-specific headwinds and regulatory challenges on even the largest established firms.

A screen of companies with a market value above $100 billion from Feb. 15, 2020, through June 17, 2026, reveals that some of the world's most recognized brands are among the worst performers. While the broader market has rallied to record highs, these companies have struggled to regain their previous valuation levels due to a variety of structural and operational issues.

Worst-performing mega-caps since February 2020

The following table details the 10 companies that have failed to recover to their February 2020 price levels, despite the overall market surge.

Sector-specific challenges drive divergence

The underperformance of these giants is attributed to specific company and sector factors rather than broad market sentiment. Alibaba Group Holding Ltd. has faced years of regulatory crackdowns in Beijing and slowing consumption in China. The Boeing Co. has been unable to escape the shadow of the 737 MAX crisis, compounded by fresh quality and production issues that have impacted cash flow.

In the pharmaceutical sector, Pfizer Inc. saw a significant collapse in vaccine and antiviral revenue as the pandemic faded, while Bristol-Myers Squibb Co. is navigating a "patent cliff" involving expirations on its major drugs. Telecommunications giants AT&T Inc. and Verizon Communications Inc. are constrained by heavy debt loads and a saturated wireless market characterized by scarce growth and price wars.

Historical parallels in market performance

The current situation mirrors historical instances where blue-chip stocks lagged behind index rallies. In March 2000, at the peak of the dot-com bubble, Cisco Systems Inc. became the most valuable company globally but took 26 years to reclaim that high. Similarly, Microsoft Corp. required over 15 years to climb back above its 1999 peak while the S&P 500 doubled. The pattern suggests that even in a roaring market, specific cohorts of former leaders can remain stagnant until new growth narratives emerge.