3 Tech ETFs to Buy as AI Selloff Creates a June Entry Point

A confluence of hawkish Fed expectations, disappointing semiconductor guidance, and a stronger-than-expected jobs report triggered a sharp rotation out of AI-exposed names in early June, pulling the PHLX Semiconductor Index down 10% on June 5 — its steepest single-session decline since March 2020. The selloff erased roughly $1.3 trillion in sector market value and pushed several high-multiple AI names into correction territory, creating what some strategists now describe as a potential entry point for tech-focused exchange-traded funds.

"The AI infrastructure spending cycle remains intact — what changed in June was the rate narrative, not the demand curve," said Andy Pratt, director of investment strategy at Burney Company. "When you see a 10% sector drawdown driven by macro noise rather than deteriorating fundamentals, that historically has been a favorable setup for dollar-cost averaging into broad tech exposure."

The selloff was concentrated in the highest-beta AI names. Nvidia Corp. fell 26% from its 52-week high of $236.26 to trade at $200.42 as of June 10, despite reporting Q1 FY27 revenue of $81.6 billion — up 85% year over year — and guiding Q2 to $91 billion. Broadcom Inc. dropped 22% in a single week after its Q3 AI revenue guide of $16 billion missed the $17.2 billion whisper number, even as the company posted 48% overall revenue growth. Advanced Micro Devices Inc. slid 17% over the same period to $452.40, though it remains up 111% year to date.

The Philadelphia SE Semiconductor index has since recovered, hitting a record high and gaining 7% for the week through June 18, according to Reuters data. The rebound was supported by Apple's agreement to partner with Intel on U.S. chip manufacturing and by Big Tech's reaffirmed spending plans, with hyperscaler AI capex set to exceed $700 billion in 2026, up from $400 billion in 2025.

The Fed Factor and What Comes Next

The June selloff was triggered in part by a strong jobs report that pushed the market to price a higher-for-longer rate path. The Federal Reserve's preferred inflation measure and a final reading on first-quarter GDP are both due next week, and either could reinforce or reverse the rate expectations that drove the rotation. Second-quarter S&P 500 earnings growth is estimated at 22.9%, down from 29.3% in the first quarter, according to LSEG data compiled by Tajinder Dhillon.

"Strong equity markets have been one of the main supports for consumers, and anything that challenges the AI trade or the continued rise in stocks is being closely watched," said Drew Matus, chief market strategist at MetLife Investment Management. "It has not just been market effects but macroeconomic effects at this point."

Micron Technology Inc. reports quarterly results on June 24, and the memory chip maker's earnings will serve as the next major test of AI demand durability. Micron shares are up 298% year to date, and the report will help investors gauge whether data center spending and semiconductor profits can continue surprising to the upside. The Nasdaq's inclusion of AI infrastructure names such as Astera Labs Inc. and CoreWeave Inc. will also force index funds to increase exposure, providing a structural demand floor.

For investors looking at tech ETFs, the June pullback has compressed valuations across the AI compute, accelerator, and custom silicon segments without breaking the demand thesis. The next leg depends on hyperscaler capex commentary and whether export policy on China data center compute shifts before fiscal year end.

This article is for informational purposes only and does not constitute investment advice.