TLDR
- SK Hynix dropped up to 10% after its record $26.5B Nasdaq debut, as investors took profits following a 500% surge over 12 months
- Micron fell 4.9%, Sandisk dropped 6%, and Western Digital slid 6% in Monday premarket trading
- AMD, Intel, Lumentum, Marvell, and Nvidia were also among the AI-linked stocks sliding
- TSMC traded flat after reporting its best-ever monthly sales of $13.8 billion in June
- MGM Resorts rose 2.7% after reports of deal negotiations with Barry Diller’s People Inc.
Artificial intelligence chip stocks fell sharply in Monday premarket trading. Investors are questioning how long Big Tech companies can keep up their heavy spending on AI infrastructure.
SK Hynix led the declines. The South Korean memory-chip maker dropped as much as 10% after its record-breaking $26.5 billion Nasdaq ADR debut last week. Its South Korean shares closed down 15% as investors took profits after a 500% price surge over the past 12 months.
The pullback followed a 12.8% gain on SK Hynix’s first day of U.S. trading. Analysts flagged concerns over HBM4 shipment timing and second-quarter earnings as adding to the selling pressure.
SK Hynix had reported strong first-quarter results, including revenue of ₩52.6 trillion ($34.5 billion) and a net profit of ₩40.3 trillion. The company holds a 58% global revenue share in the high-bandwidth memory market.
Despite those numbers, analysts noted that heavy exposure to high-bandwidth memory could limit how much the company benefits from a recent rebound in conventional DRAM pricing.
Rival chip maker Micron fell 4.9% in premarket trading. Flash-memory supplier Sandisk dropped 6%. Western Digital also fell 6%, dragged down by the broader sector selloff.
The weakness spread across the industry. AMD, Intel, Lumentum, Marvell, Nvidia, and Seagate all declined in early trading Monday.
Other Stocks on the Move
Not all stocks moved lower. MGM Resorts rose 2.7% after the Wall Street Journal reported that Barry Diller’s People Inc. had been in deal talks with the casino operator. Neither MGM nor People immediately responded to requests for comment.
Stellantis climbed 0.9% after reporting a 10% rise in second-quarter vehicle shipments. The Jeep maker credited strong demand for new models in North America.
Taiwan Semiconductor Manufacturing traded flat despite posting its best month ever for sales. The chip manufacturer reported June revenue of 442.68 billion New Taiwan dollars, or about $13.8 billion.
TSMC is set to report its full second-quarter earnings on Thursday. That report will be closely watched given the broader questions around AI chip demand.
Stock futures edged lower overall in premarket hours. Investors were also weighing fresh escalations in the Middle East alongside a busy week of corporate earnings reports.
The selling in chip stocks reflects wider investor caution around AI spending. Big Tech companies have committed to massive infrastructure budgets, and markets are starting to ask when that spending will translate into returns.
The declines Monday follow a week in which SK Hynix’s U.S. debut drew heavy attention. The stock’s rapid reversal shows how quickly sentiment can shift even after a strong debut.
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