‘Brutal session’ for chip stocks shows AI trade is turning
SMH•Chip stocks fell across Asia and the United States as investors grew more cautious about AI spending and rising interest rates. South Korea’s KOSPI dropped more than 6%, while the Philadelphia Semiconductor Index fell 2.7% and Micron was down 5%.
1. Chip stocks slide
Selling in AI-related shares intensified across markets on Tuesday. South Korea’s KOSPI fell more than 6% in its fifth straight down day, while the Philadelphia Semiconductor Index was down 2.7% and on track for a sixth consecutive decline; Micron fell 5%.
2. Investors reassess risks
The article describes growing concern that higher interest rates and bond volatility could raise the cost of capital for the AI buildout. Shanghai’s tech-focused STAR Market had lost more than a third from its July peak, while the KOSPI was down a quarter from its July high.
3. Caution spreads
Firmus shelved a planned $5 billion Australian IPO last week as investor interest weakened. The IMF warned that the consequences of an AI correction could be global, while an investment strategist said the South Korean selloff may reflect positioning and the cost of capital rather than a fundamental deterioration in AI demand.
