iShares Semiconductor ETF falls more than 20% from June peak

The iShares Semiconductor ETF's slide into bear territory marks a sharp reversal after three years of blistering gains for AI-linked stocks. Investors are worried about a range of potential risks, from rising funding costs for data centers to weaker future demand than anticipated, which could derail the infrastructure spending boom. That concern is now spilling over into major indexes like the Nasdaq-100 and the S&P 500, which could hurt investors' sentiment toward the market overall. The author sees the sell-off as a potential opening, naming Datadog and Palo Alto Networks as two AI stocks outside semiconductors worth watching if the correction intensifies, while cautioning that both carry valuations above their three-year averages.