SOX semiconductor index sinks 11% as AI sell-off hits Celestica

The sell-off marks a sharp reversal in sentiment for Canada's technology sector, which had been riding the global AI investment wave. Reuters reported the SOX semiconductor index's 11% drop was its worst day since March 2020, and one strategist described the move as "the unwinding of the AI trade." The damage has been concentrated in AI beneficiaries rather than the broad market, according to Bloomberg Opinion's John Authers, with more than $2T leaving the Nasdaq 100 in October.

Within Canada, the divide is stark. Celestica, a hardware manufacturer tied to AI infrastructure, has borne the brunt, while software names like CSU and DSG have held up — though their elevated valuations leave little cushion if the rotation reverses. Telecom providers BCE and Telus are moving the other way as investors seek steadier cash flows.

Deutsche Bank had upgraded US tech on Nov 2, saying the selloff had gone too far, but the pressure persists. The next catalyst is NVIDIA's Nov 17 earnings report, which is seen as the likeliest swing factor for Celestica and the AI DRCs — a weak print could extend the damage, while a strong one could spark a rebound in oversold hardware names.