Down 13.24% from previous session

Chip stocks slide; Nvidia also drops 4%

Wall Street falls; Nasdaq sheds 2.2%

US media eyes Korean market: 'Weakening momentum, Micron also at risk'

US memory chipmaker Micron Technology. [Reuters]
US memory chipmaker Micron Technology. [Reuters]

AI chip stocks tumbled across the board on Wall Street, with memory chipmaker Micron Technology leading the decline. Growing concerns that the frenzy over AI infrastructure investment may have gone too far are driving profit-taking in the memory and semiconductor stocks that powered this year's market rally.

Micron Technology fell 13.24% from the previous session on Tuesday on the New York Stock Exchange.

SanDisk dropped 13%, while storage device maker Seagate Technology shed more than 5%. Intel fell 6%, AMD slid nearly 6%, and Qualcomm tumbled 8%. Nvidia also declined more than 4%.

All three major indexes on Wall Street closed lower as selling pressure in global technology and chip stocks persisted.

The Dow Jones Industrial Average fell 45.87 points, or 0.09 percent, to close at 51,666.84. The S&P 500 dropped 107.33 points, or 1.44 percent, to 7,365.46, while the tech-heavy Nasdaq Composite slid 579.56 points, or 2.22 percent, to 25,587.04.

The VanEck Semiconductor ETF (SMH), which tracks the broader chip sector, plunged 7%, and the technology-focused XLK ETF fell 4%. The Philadelphia Semiconductor Index (SOX) tumbled 7.8%.

The Motley Fool, a US investment outlet, pointed to conditions in the South Korean stock market as a backdrop to the selloff. Memory chip-related stocks had surged sharply this year, fueling signs of overheating in Korean equities and stoking growing concern in recent weeks.

The outlet also said leveraged exchange-traded funds were amplifying short-term share price volatility by stimulating speculative demand among retail investors.

Leveraged ETFs are products designed to deliver a multiple of the gains or losses of an underlying asset. They have gained popularity among retail investors drawn by the prospect of outsized returns.

"Investors have been turning to Micron as a relatively undervalued alternative to avoid the high valuations of Samsung Electronics and SK Hynix, so if the upward momentum in Korean memory stocks weakens, Micron could also feel the impact," The Motley Fool said. It added that questions are being raised about whether a significant portion of Micron's recent share price gains reflected not just expectations of an improving memory chip cycle, but also a crowding effect driven by investor flows.


yckim6452@heraldcorp.com