Nvidia (NVDA) stock fell nearly 5% Thursday on investor fears of a slowdown in artificial intelligence spending and potential delivery delays of its AI chips.

Semiconductor stocks suffered across the board. The PHLX semiconductor index (^SOX) fell 4%, slumping more than the broader market. Nvidia rival Advanced Micro Devices (AMD) fell 3%, while Intel dropped 3.5%, Qualcomm (QCOM) sank 2.9%, and Broadcom (AVGO) tumbled 3.9%. Arm (ARM), meanwhile, plunged 8.5%.

Microsoft (MSFT), in its earnings report late Wednesday, indicated that delayed shipments of GPUs (i.e. AI chips, or graphics processing units) from “third parties” weighed on its guidance for its AI cloud business in the current quarter. Microsoft primarily uses Nvidia’s GPUs in data centers to power its artificial intelligence software.

“Microsoft said they are not meeting current demand because they can’t get data centers up in time, which could indicate they are not getting the NVDA chips they depend on in time to support their customers,” wrote D.A. Davidson analyst Gil Luria in an email to Yahoo Finance.

Nvidia did not immediately respond to Yahoo Finance's request for comment.

Persistent fears of a slowdown in spending among AI hyperscalers also contributed to Nvidia's drop in share price. Microsoft’s CFO Amy Hood suggested in a call with analysts Wednesday evening that its growth in AI-fueled spending will eventually ease, but was vague about when that would happen.

“As long as we continue to see that [AI-related cloud] demand grow … the growth in capex will slow and the revenue growth will increase,” she said. “The pace of that entirely depends really on the pace of adoption.”

Google parent Alphabet (GOOG), in its third quarter earnings report, said that its capital expenditures would not increase in the fourth quarter. “As we look forward, we are working to balance our investments in AI and other growth areas with the cost discipline needed to fund those activities,” said CFO Anat Ashkenazi on a call with analysts Tuesday following the company’s results. He added that while spending will increase in 2025, it will be “likely not the same percent step-up that we saw between '23 and '24.”

Advanced Micro Devices’ quarterly earnings results on Tuesday contributed to investor concerns as well, as the company’s fourth quarter sales outlook came in slightly lower than expected. The chipmaker expects revenue of $7.5 billion for the current quarter, compared to the $7.55 billion forecast by analysts tracked by Bloomberg. The softer-than-expected guidance weighed heavily on AMD shares, which suffered their biggest single-day loss in two years on Wednesday.