Global Chip Stock Rally Founders on Concerns Over Valuations (1)

This year’s frenetic rally in global semiconductor stocks hit a setback on concerns that valuations for some of the biggest winners have soared too quickly and that gains have been excessive.

Shares of Advanced Micro Devices Inc. were more than 4% lower in premarket trading Wednesday, after the chipmaker’s guidance failed to meet investors’ high expectations. AMD’s results followed a 4.1% decline in the Philadelphia Semiconductor Index on Tuesday, the sharpest drop in more than three weeks.

The chip stock slump spread to other markets on Wednesday. In Asia, Taiwan Semiconductor Manufacturing Co. declined 3%, while losses in Samsung Electronics ...