Micron and Applied Materials lead AI chip rout on Fed rate hold, SOXX -5.4%

AI chip stocks suffered one of their worst sessions in months Wednesday as the Federal Reserve held benchmark interest rates steady, then spooked fixed-income markets with language implying the central bank is falling behind on inflation. The SOXX semiconductor ETF dropped 5.4% to $465.00. The Nasdaq Composite fell 1.7% to 24,442.94, slipping more than 10% below its all-time high into correction territory. The S&P 500 slid 1.5% to 7,316.15. Enterprise SaaS names diverged sharply: Datadog gained 5.3% and ServiceNow gained 4.7% as fund managers rotated out of hardware into near-term earnings catalysts. StartupHub.ai data shows 340 active companies in the semiconductor and AI chip space we track, with Seed-to-Series-B rounds still the most common funding stages - a signal that private capital has not followed public markets into retreat.

Top AI stocks today: July 29, 2026

Micron leads the chip carnage, down nearly 10%

Micron Technology Inc. (NASDAQ: MU) fell 9.94% to $739.00, the steepest single-session loss in our coverage universe and an extension of a brutal five-day slide of 25.4%. The drop comes roughly five weeks after Micron reported blowout fiscal third-quarter results: revenue of $41.46 billion exceeded the $35.25 billion consensus estimate, and EPS of $25.11 demolished the $20.28 forecast, with data-center sales rising nearly sevenfold year over year, per Micron's investor-relations filing. Wednesday's move looks primarily macro-driven - the Fed's hawkish-by-omission statement lifted yields and compressed the high multiples AI chip stocks accumulated through mid-2026. MU retains a 134% year-to-date gain entering the next leg of the AI memory cycle.

Datadog surges 5% while AI chip stocks crumble

Datadog Inc. (NASDAQ: DDOG) rose 5.31% to $264.20, the largest single-session gain in the portfolio on a day when nearly every other AI name retreated. The move is a pre-earnings rotation: Datadog reports fiscal Q2 results on August 6, and investors are positioning ahead of what they expect to be another strong beat after the company crossed $1 billion in quarterly revenue for the first time in Q1 2026, growing 32% year over year, with annual recurring revenue exceeding $4 billion. Benchmark raised its price target on DDOG to $330 in July 2026, per TradingKey. ServiceNow (NYSE: NOW, +4.65% on exceptionally heavy volume), Snowflake (NYSE: SNOW, +4.64%), Salesforce (NYSE: CRM, +3.79%), and monday.com (NASDAQ: MNDY, +3.63%) followed the same logic - fund managers rotating into SaaS names with near-term binary catalysts and away from hardware exposure. For investors researching the best AI stocks to buy in July 2026, today's SaaS divergence is the clearest signal of where institutional money is moving ahead of the August earnings cycle.

CoreWeave and Super Micro give back their July gains

CoreWeave Inc. (NASDAQ: CRWV) dropped 9.63% to $60.82, extending a one-month loss of 38.9% and erasing gains logged in early July. Super Micro Computer Inc. (NASDAQ: SMCI) fell 9.67% to $25.70, despite having surged roughly 20% the prior week after disclosing record fiscal Q4 orders exceeding $60 billion and gross margins of 15-17% against prior guidance of 8.2-8.4%, per Benzinga. Profit-taking following an outsized gap in a smaller-cap AI infrastructure name is a well-worn pattern; the formal Q4 results due August 11 will be the next hard data point for the AI server supply chain narrative.

Notable but quieter

Applied Materials Inc. (NASDAQ: AMAT) dropped 8.40% to $436.45 as the wafer-fabrication equipment complex absorbed one of its heaviest single-day losses of the year; Lam Research Corp. (NASDAQ: LRCX) fell 6.40% in sympathy. ARM Holdings plc (NASDAQ: ARM) lost 8.11% to $224.89, putting the AI chip design-licensing name down 36.6% over one month - the premium for AI architecture exposure deflating alongside the broader cycle. Advanced Micro Devices Inc. (NASDAQ: AMD) shed 5.51% to $429.56. NVIDIA Corp. (NASDAQ: NVDA) dropped 3.55% to $190.01 on volume of 136.6 million shares, roughly 2-3x its typical daily print, yet retained a marginal 0.6% year-to-date gain. Taiwan Semiconductor Manufacturing Co. (NYSE: TSM) fell 4.50% to $374.67 as South Korea's Kospi exchange triggered a circuit breaker for the second consecutive day - SK Hynix and Samsung tumbling 13% and 8% respectively, per Bloomberg - amplifying contagion across the entire global chip supply chain.

Microsoft Corp. (NASDAQ: MSFT, -0.71%) and Meta Platforms Inc. (NASDAQ: META, -1.31%) were notably resilient as investors squared positions ahead of fiscal earnings reports due after Wednesday's close. Both prints - especially the AI capex guidance and Azure and Meta AI monetization commentary - are the most consequential near-term catalysts for the Magnificent 7 AI stocks and the broader AI infrastructure trade.

What are the top AI stocks to buy in July 2026?

Across hardware, hyperscale cloud, and enterprise SaaS, the consensus top AI stocks in July 2026 include Micron (MU), Applied Materials (AMAT), and NVIDIA (NVDA) on the AI chip stocks side; Microsoft (MSFT) for hyperscale AI infrastructure; and Datadog (DDOG) and ServiceNow (NOW) for enterprise AI software. Wall Street's 2026 focus has shifted from training-cluster buildout to inference economics and AI-agent monetization, reshuffling which names lead each session. Today's broad selloff in top 2026 AI stocks is a classic Fed-day repricing: higher yields compress growth multiples and force rotation into names with near-term earnings catalysts. The best AI infrastructure stocks and AI chip stocks to watch into August are those reporting soonest: MSFT and META tonight, AAPL and AMZN Thursday, DDOG August 6, NVDA August 26.

What to watch tomorrow

Microsoft and Meta report fiscal earnings tonight after the close; pre-market futures on Thursday will price the reaction and likely set the opening direction for all AI stocks to watch. Apple Inc. and Amazon.com Inc. both report Thursday after the bell, covering the full hyperscaler and consumer AI picture. Super Micro's formal Q4 results are due August 11. Datadog Q2 lands August 6. NVIDIA's fiscal Q2 earnings - the single biggest catalyst on the AI chip stocks calendar this summer - are scheduled for August 26. Thursday also brings the initial Q2 GDP estimate, a key macro read on whether the Fed's inflation concern lands on a growth slowdown or is additive to it.

Not investment advice.

Core watchlist

Chips

NVIDIA (NVDA): -3.55% on very heavy volume (136.6M shares, ~2-3x typical). Macro repricing on Fed day; 0.6% YTD gain intact. Next catalyst: fiscal Q2 earnings Aug 26.

AMD (AMD): -5.51% on above-average volume. AI accelerator narrative intact but the stock is down 26% over one month; watching the NVDA Aug 26 print for demand read-across.

Broadcom (AVGO): -2.78% on heavy volume. Custom silicon ramp is the multi-year thesis; move today is pure macro with no stock-specific news.

Taiwan Semiconductor (TSM): -4.50% on above-average volume. Global supply-chain contagion from South Korean market circuit breakers; next catalyst is TSMC's Q3 revenue guidance.

Hyperscalers

Microsoft (MSFT): -0.71% on heavy volume. Fiscal Q4 earnings due tonight; Azure AI revenue growth is the number the market will trade on.

Alphabet (GOOGL): +0.90% on average volume. Rare green in a down session; Q2 already reported, Google Cloud AI momentum providing tape support.

Meta Platforms (META): -1.31% on average volume. Fiscal Q4 earnings due tonight; AI infrastructure capex guidance is the primary investor focus.

Amazon (AMZN): -1.82% on average volume. Q2 earnings due July 30; AWS AI services growth rate is the read-through for the entire cloud AI trade.

Enterprise SaaS

Oracle (ORCL): -1.85% on heavy volume. Cloud infrastructure bookings growth the thesis; macro pressure only, no stock-specific catalyst today.

Salesforce (CRM): +3.79% on heavy volume. Agentforce monetization is the entire thesis; move today reflects sector rotation into near-term earnings catalysts away from chip hardware.

ServiceNow (NOW): +4.65% on exceptionally heavy volume (~37M shares vs 5-8M typical). Workflow-AI agent adoption is the carrier; outsized volume signals institutional conviction, not just passive rotation.

monday.com (MNDY): +3.63% on above-average volume. mondayAI suite expansion is the multi-quarter narrative; move in line with the broader SaaS divergence on Fed day.

Vol / retail

Palantir (PLTR): -0.43% on average volume. Holding near key technical levels; government AI contract pipeline is the fundamental anchor. Nothing material in today's tape.

Tesla (TSLA): -2.97% on average volume. Autonomy and Optimus robot are the long-term AI narratives; near-term watching any FSD fleet expansion update.

Snowflake (SNOW): +4.64% on above-average volume. Data-cloud AI platform is the carrier; move in line with SaaS peers. Watching net revenue retention trend at the next earnings print.