The world’s most valuable semiconductor stocks wiped more than $1 trillion from their market capitalization this week as investor anxiety spread through the sector.
The decline was led by NvidiaSince the market closed on Friday, there has been a $238 billion plunge. SK Hynix, Samsung Electronics and micron All major companies in the memory space lost $176 billion, $173 billion, and $113 billion, respectively.
The chip sector has been one of the main beneficiaries of the AI boom, with investors rushing into stocks to take advantage of the huge amount of money being poured into the sector.
The Philadelphia Semiconductor Index (SOX), which tracks 30 publicly traded U.S. companies involved in the semiconductor sector, is up 92% over the past 12 months, despite falling nearly 20% last month.
The world’s 20 most valuable chip stocks have lost a combined $1.3 trillion since Friday’s market close, according to a CNBC analysis using FactSet data.
AMD It also reduced approximately $110 billion, Taiwan Semiconductor Manufacturing Co., Ltd. Lost $119 billion.
“This decline seems to be driven more by sentiment than fundamentals,” said Michael Field, chief equity strategist at Morningstar.
“Simply put, it’s a loss of confidence,” he added. “We continue to see upside potential in many AI stocks, but these are growth stocks, so much of their value comes from cash flows expected far into the future, which requires a lot of confidence from investors.”
Charlie Dye, vice principal analyst at Forrester, said the sharp decline reflects concerns that spending on AI infrastructure is “peaking sooner than expected.” Alphabet has announced an increase in its capital spending forecast for 2026 as it rushes to build new AI infrastructure.
“Investors are reevaluating whether near-term returns justify unprecedented AI spending levels, while some are concerned about increased competition in chips and AI infrastructure,” Dai said.
But he added that the decline was “more due to a re-pricing of expectations after an unusually strong rally than due to weakening AI demand.”
moving on wednesday
Technology stocks in Asia and Europe widened their losses on Wednesday, led by semiconductor stocks as U.S. markets were once again weak.
In South Korea, SK Hynix closed down 9.61% after falling more than 15%. The semiconductor giant fell short of analysts’ expectations despite posting record quarterly profits and sales.
Samsung Electronics fell more than 5%, LG Innotek fell 10.89%, and Seoul Semiconductor fell 8.89%.
Chip stocks were mixed in Europe. ASML down 1.77%, ASM International down 3.28%, Beshi It rose by 1.67%.
Kieron Poon, director of Asian equities at Aberdeen Investments, said in a note on Tuesday that the recent weakness in Asian semiconductor stocks reflects “the ongoing deleveraging process in South Korea and softening sentiment towards global tech stocks.” However, he added that recent volatility “does not change our long-term positive view.”
Japanese chip names also decreased. Japanese computer memory maker Kioxia fell 13.85%. Tokyo Electron fell 10.59%, and SoftBank Group, a major AI investment agency, fell 6.95% through its Arm shares.
Taiwan’s TSMC, the world’s largest contract semiconductor manufacturer, fell 3.51%.
The ChiNext 300 index, which is dominated by mainland Chinese tech stocks, rose 1.43%, while the Hang Seng China Semiconductor Chip Index fell 2.5%.
The decline in Asian markets followed overnight declines in US semiconductor stocks.
Although Nvidia was down in the Open, the session ended flat. Intel fell nearly 6% and AMD fell 8%. Memory giants Micron and Seagate fell more than 8%, Western Digital fell nearly 7% and Sandisk fell 14%. SK Hynix’s US shares fell 9%.
Despite the sharp pullback, Aberdeen views the decline as an opportunity rather than a deterioration in fundamentals. “The recent market decline has brought valuations to more attractive levels, creating an opportunity to add exposure to high-quality businesses at more reasonable prices,” Poon said.
The recent decline in AI-related chip stocks reflects investors “taking back a little bit of the bubble that was in the AI market,” David Riedel, founder and president of Riedel Research Group, told CNBC’s “Squawk Box Asia” on Wednesday.
“The market is healthy,” he said, although concerns over AI funding and increased competition from China weighed on the market, adding that memory chip makers were “okay” but “they just need to give back some of their sudden profits.”
Chinese internet stocks listed in Hong Kong bucked broader regional weakness, with Tencent and Meituan up 4.29% and 2.05%, respectively, as of 3:26 a.m. ET. Alibaba, Baidu and Kuaisho Everything traded higher.
