Chip stocks crash despite Samsung's profit surge as AI demand expectations reset valuations

Chip stocks sell off after Samsung earnings fall short of high AI bar

Samsung shares slide despite profit exceeding Nvidia and Apple Investors dumped semiconductor stocks on Tuesday after results from Samsung Electronics failed to meet Wall Street's lofty artificial intelligence demand expectations. Shares dropped 8% even after the South Korean electronics company's quarterly profit surpassed both Nvidia and Apple, and the company said it expects operating profit to jump $1,800%. The results are the latest sign on Wall Street that sometimes beating results isn't enough to please investors in the AI revolution. Previously, this market phenomenon has contributed to post-earnings declines for Nvidia and major cybersecurity stocks such as CrowdStrike and Palo Alto Networks. Korea-listed shares of South Korea's Kospi fell about 5% in sympathy with Samsung. SK Hynix, which is slated to list shares on the Nasdaq this Friday, dropped about 7%. The company plans to raise $28 billion in the second-largest sale after SpaceX. Tuesday's selloff could also stem from a recalibration in expectations after memory's historic run, or investors readying for SK Hynix's listing this week.

The AI Trade Is Off to a Hot Start This Week as Chip, Memory Stocks Surge

Get personalized, AI-powered answers built on 27+ years of trusted expertise. The AI trade is off to a strong start this week, with several chip and memory stocks among the biggest gainers in the S&P 500 and Nasdaq on Monday. Chipmaker Advanced Micro Devices (AMD) was leading S&P gainers, up 8% in recent trading. Several other hardware makers were also posting big gains, with Western Digital (WDC), Qualcomm (QCOM), ON Semiconductor (ON) and Microchip Technology (MCHP) each up at least 5%. Major AI names including Nvidia (NVDA), Taiwan Semiconductor Manufacturing (TSM), Broadcom (AVGO), Micron Technology (MU) and Intel (INTC) were also posting solid gains, while the Philadelphia Semiconductor Index (SOX) rose more than 3% and the Roundhill Memory ETF (DRAM) surged 8%. Chip stocks are recovering from a recent pullback, as analysts have remained bullish on the outlook for the AI trade despite the volatility that has plagued tech stocks. Bank of America analysts wrote Monday that they see the recent slump as "a healthy reset, not a structural change in AI demand," and said that periods of consolidation in the tech sector are "often followed by renewed momentum as investors regain confidence in the next leg of earnings and capex growth." The analysts said they expect cloud and AI spending to reach $1.5 trillion next year, up about 40% to 50% year-over-year, noting that spending should be spread among multiple sectors including memory, chips and networking hardware, benefitting a wide range of stocks.

US stocks today: S&P 500 ends down as AI worries hit chipmakers

U.S. markets closed lower as chip stocks declined on concerns the AI-driven rally may be overstretched. Losses in Micron and other semiconductor firms weighed on indices, while rising competition from China and unmet expectations after Samsung's earnings added pressure. Investors are reassessing valuations amid continued volatility in AI-linked stocks. The S&P 500 ended lower on Tuesday, weighed down by losses in Micron Technology and other chipmakers due to mounting doubts about the sustainability of Wall Street's AI-driven rally. Chip stocks in Asia and the ⁠United States ⁠dropped after memory chip giant Samsung Electronics' blowout earnings report failed to satisfy investors with sky-high expectations. Micron and Sandisk both fell, pulling the PHLX chip index lower. Adding to worries about high-flying chipmakers, Reuters reported that Chinese startup DeepSeek is developing its own AI chip, a push that could reduce its dependence on Nvidia and Huawei chips. US MarketsPowered By As on 08 Jul 2026, 01:20 AM IST S&P 500 Top Gainers Occidental Petroleum51.83(6.19%) Cboe Global Markets259.75(5.99%) Devon Energy42.71(5.81%) Cognizant Tech Solns43.64(5.49%) Gainers" S&P 500 Top Losers Teradyne337.10(-11.18%) Intel109.35(-10.52%) Solstice Advanced Mat61.61(-9.47%) Generac Hldgs234.07(-9.21%) Losers" According to preliminary data, the S&P 500 lost 34.07 points, or 0.45%, to end at 7,503.36 points, while the Nasdaq Composite lost 310.06 points, or 1.19%, ⁠to 25,811.10. The Dow Jones Industrial Average fell 140.30 points, or 0.26%, to 52,915.61. Tuesday's chip selloff marked the latest bout of volatility among memory chipmakers and other AI-related stocks as ⁠investors worry that sharp gains related to the buildout of AI data centers may have left the shares too pricey. "The story of today is the story of the last few weeks, and that's rotation after the blistering run in the AI buildout, semis and memory. Expectations have gotten to be almost impossible to beat for these companies," said Zachary Hill, head of portfolio management at Horizon Investments in Charlotte, North Carolina. Another test of the appetite for chip stocks looms on Friday, when South Korean giant SK Hynix's U.S. listing starts trading on the Nasdaq. Elon Musk's SpaceX fell in its first day of trading as part of the Nasdaq 100 index, and after a wave of brokerages initiated coverage on the stock. The ⁠Dow ended lower after hitting an all-time high earlier in the session. Oil prices rose following reports of attacks on vessels near the Strait of Hormuz. Fiserv climbed after media reports that the firm had held discussions with U.S. banks including JPMorgan and Bank of America to sell its payments infrastructure business handling debit card transactions. U.S. Federal Reserve watchers will get another glimpse into how new Chair Kevin Warsh steers the central bank when it releases the minutes of its latest meeting on Wednesday, the first of his tenure.

Micron, Intel shares crash up to 8% as Samsung fails to calm concerns over AI

Global semiconductor stocks fell sharply as Micron and Intel dropped up to 8%, tracking weakness in Asian peers despite strong Samsung earnings. Investors are reassessing valuations after a strong AI-led rally, while concerns over custom chip development and future demand are making markets more selective towards AI-linked semiconductor companies. Micron Technology shares fell more than 7% on Tuesday, while Intel crashed nearly 8% as investors turned cautious on semiconductor stocks, with strong earnings from Samsung Electronics failing to calm concerns that the AI-led chip rally may have run too far. The selloff hit several chip names. Intel fell 3.3%, while Marvell Technology dropped 4.5% amid broader weakness in the sector. The pressure came after a sharp fall in Asian chip stocks earlier in the day, led by Samsung Electronics and SK Hynix. US MarketsPowered By As on 07 Jul 2026, 07:31 PM IST S&P 500 Top Gainers Workday144.48(4.70%) GoDaddy89.31(4.32%) Fidelity National Info43.04(4.29%) Molson Coors Beverage40.52(4.26%) Gainers" S&P 500 Top Losers GE Vernova1,046(-9.24%) Applied Materials538.82(-9.10%) Coterra Energy32.56(-8.62%) Teradyne346.95(-8.58%) Losers" Samsung shares tumbled 6.9% in Seoul even after the company forecast a 19-fold jump in second-quarter operating profit. The numbers beat expectations and marked a major recovery for the South Korean chipmaker, but investors were not impressed. The stock had already more than doubled this year before Tuesday's fall, leaving little room for even a strong earnings surprise. The weakness spread across South Korea's market. The KOSPI closed down 4.9% after falling as much as 8.2% intraday. Circuit breakers were triggered during the session as volatility in semiconductor stocks intensified. SK Hynix, another major AI memory winner, also fell sharply. The selloff showed a shift in investor mood. For most of the year, chip stocks have been among the biggest winners of the AI trade, helped by expectations of strong demand for memory, data centre chips and AI infrastructure. But after a powerful rally, investors are now questioning how much of that growth is already priced in. Micron has been one of the companies seen as a beneficiary of rising memory demand from AI servers. High-bandwidth memory and advanced DRAM have become important parts of the AI supply chain, with investors betting that demand from cloud companies and chip designers will support pricing and margins. Tuesday's fall suggests that the market is becoming more selective, even for companies tied to AI infrastructure. Sentiment was also hit by a Reuters report that Chinese startup DeepSeek is developing its own AI chip. The chip is aimed at inference tasks and could reduce DeepSeek's reliance on Nvidia and Huawei chips, Reuters reported, citing sources. The project is still at an early stage but reflects a broader push by Chinese AI companies to build more of their own hardware as US export controls limit access to advanced chips. That news added to concerns that the AI hardware market may become more fragmented over time. While demand for AI chips remains strong, investors are watching whether large AI companies and startups begin shifting towards custom chips, which could change the demand outlook for established suppliers. The immediate trigger for the weakness, however, was Samsung's market reaction. The company's forecast showed that earnings are recovering sharply as memory prices improve and AI demand supports advanced chips. But the fall in the stock after such a strong forecast suggested that investors had already built in much of the good news. Chip stocks have seen similar bouts of volatility in recent weeks as investors weigh strong near-term earnings against high valuations. The sector has benefited from massive AI spending by technology companies, but questions remain over how quickly that spending will translate into profits across the broader AI ecosystem.

U. S Stock Market today: Why are Nvidia, Micron Technology, Sandisk, Intel shares down on Tuesday?

U. S Stock Market on Tuesday: Chip stocks have been some of the biggest winners of the AI trade so far this year amid hopes of insatiable AI demand, though concerns of the sector ⁠being overbought as well as profit-taking by investors have led to some volatility lately. Nvidia fell 1.5 per cent in premarket trading on Tuesday after Reuters reported the Chinese startup is developing its own AI chip, a move that could ⁠reduce its ⁠reliance on Nvidia and Huawei chips. Memory chipmakers drove losses meanwhile, with Micron Technology down 4.7 per cent, Western Digital off 6.3 per cent and Sandisk losing 4.6 per cent. Nasdaq was set to open lower on Tuesday amid declining chip stocks, with investors questioning the momentum of the AI-led rally despite Samsung's strong earnings, while a report on China's DeepSeek making its own AI chip also hit sentiment. Other chip-related stocks including Intel fell 3.3 per cent. Marvell Technology also eased and was down 4.5 per cent amid sector wide weakness. Another test of the appetite for chip stocks looms later this week, when South Korean giant SK Hynix's U.S. listing begins trading on the Nasdaq. Dow E-minis rose 156 points, or 0.29 per cent, S&P 500 E-minis lost 8.25 points, or 0.11 per cent and Nasdaq 100 E-minis shed 247 points, or 0.82 per cent. Chip stocks have been some of the biggest winners of the AI trade so far this year amid hopes of insatiable AI demand, though concerns of the sector ⁠being overbought as well as profit-taking by investors have led to some volatility lately. Samsung Electronics' shares sank in South Korea despite the company reporting a 19-fold jump in second-quarter operating profit and surpassing its combined earnings over the past three years. Elon Musk's SpaceX was set to begin trading as part of the Nasdaq-100 index on Tuesday and a wave of brokerages initiated coverage on the stock as an industry-mandated quiet period ended. Its shares were last up 0.4 per cent. Dow futures bucked the trend as software plays Microsoft , Salesforce and IBM rose. The blue-chip index crossed the 53,000-point mark on Monday for the first time ever. The index clocked its fifth 1,000-point milestone this year as receding oil prices on the back ⁠of easing Middle East tensions have offered some support. Oil prices, however, rose on Tuesday following reports of attacks on vessels near the Strait of Hormuz. Fiserv climbed 5.5 per cent after media reports that the payments firm had held discussions with U.S. banks including JPMorgan and Bank of America to sell its payments infrastructure business handling debit card transactions. Rivian dropped 10.7 per cent after the electric-vehicle maker launched an offer to sell 75 million shares even as it forecast second-quarter revenue above analysts' estimates. Meanwhile, U.S. Federal Reserve watchers will get another glimpse into how new Chair Kevin Warsh steers the central bank when the minutes of its last meeting are released on Wednesday, the first of his tenure. Traders currently see at least one 25-basis-point rate hike on the cards this year, according to data compiled by LSEG.

Asia stocks fall as AI valuation fears overshadow Samsung's blockbuster earnings By Investing.com

Investing.com -- Asia stocks retreated on Tuesday as investors questioned whether future earnings growth can justify elevated artificial intelligence-related valuations, sending semiconductor shares lower despite Samsung Electronics Co Ltd (KS:005930) posting another quarter of record profit. Broader risk sentiment remained relatively stable, but renewed selling in Asia's AI supply chain dominated regional trading after Samsung's earnings failed to dispel concerns over whether soaring investment in artificial intelligence infrastructure can continue to generate returns that justify the sector's rich valuations. All three major U.S. stock indexes ended higher on Wall Street overnight, while Nasdaq 100 Futures slipped 0.6% and S&P 500 Futures lost 0.2% in Asian trading. Unlock premium AI, semiconductor and macro insights with InvestingPro Samsung earnings fail to reassure as AI valuation concerns persist South Korea once again dictated regional sentiment after Samsung Electronics, the world's largest memory-chip maker, reported another quarter of record operating profit, underscoring continued demand for high-bandwidth memory chips used in artificial intelligence servers. Samsung shares slid over 8% after the results. The selling dragged the KOSPI down 6.9%, making it the region's worst-performing major benchmark. The selloff followed a powerful rally across semiconductor shares in recent months, with investors increasingly debating whether future earnings growth can keep pace with current valuations after hyperscalers committed hundreds of billions of dollars to AI infrastructure. "The fear is that if investments moderate over time, memory demand growth could slow and affect the profit outlook for chipmakers," said Vasu Menon, Managing Director of Investment Strategy at OCBC. Menon said investors were increasingly looking beyond Samsung's strong quarterly earnings toward the sustainability of record memory-chip profits, while recurring concerns over whether hyperscalers will ultimately generate sufficient returns on AI spending continue to cloud sentiment across the semiconductor sector. The weakness spread across the broader semiconductor supply chain. SK Hynix Inc (KS:000660) dropped over 8% after formally launching the marketing process for its planned U.S. listing on Monday, while Japan's Nikkei 225 tumbled 1.6%. The broader TOPIX slipped 0.2%. Selling spread across Asia's AI hardware supply chain beyond South Korea's memory-chip makers. Nvidia's largest AI server assembly partner, Hon Hai Precision Industry Co Ltd (TW:2317) (Foxconn), fell 1.7% despite reporting stronger-than-expected June and second-quarter revenue, while Taiwan's MediaTek Inc (TW:2454) dropped nearly 3%. Japan's Murata Mfg Co (TYO:6981) tumbling 8.3%. The broader MSCI Asia Pacific Index fell over 1%. India outperforms as investors await regional inflation, central banks Outside North Asia, regional markets were more resilient despite renewed geopolitical uncertainty. Brent crude climbed after reports Iran fired missiles toward commercial vessels transiting the Strait of Hormuz, although gains remained limited amid expectations that higher OPEC+ production should help offset supply risks. Mainland Chinese equities also weakened, with the Shanghai Shenzhen CSI 300 falling 1% and theShanghai Composite losing 1.2%, while Hong Kong's Hang Seng} eased 0.4%. By contrast, India's Gift Nifty 50 Futures gaining 0.7%, while the Jakarta Stock Exchange Composite Index advanced 0.4%. Singapore's STI climbed 0.7%, although Australia's S&P/ASX 200 slipped 0.4% and Malaysia's KLCI edged down 0.2%. Attention is now shifting from corporate earnings to a busy week of regional macro events that could shape expectations for monetary policy across Asia. Thailand's June inflation slowed to 2.6% from 2.8%, broadly in line with expectations as lower energy costs helped ease price pressures. Investors will next watch Philippines and Taiwan CPI data due later this week, followed by China's June inflation report and Bank Negara Malaysia's policy decision on Thursday. The Reserve Bank of New Zealand is also scheduled to announce its policy decision on Wednesday, with markets broadly expecting a 25-basis-point rate increase after policymakers adopted a more hawkish stance in recent months. Beyond regional data, investors will also parse Wednesday's Federal Reserve minutes for fresh insight into policymakers' thinking after softer U.S. labour-market data tempered expectations of further tightening, while the start of earnings season will test whether the AI investment boom is continuing to translate into corporate profits.

US Stocks: Micron, Intel and other chip stocks fall up to 11% after record-breaking rally

Chip stocks experienced a significant downturn, with major AI rally leaders seeing sharp profit-taking after a record quarter. The VanEck Semiconductor ETF plunged over 5%, led by Micron, Intel, and AMD. Concerns over potential AI computing oversupply, fueled by Meta's plans, prompted investors to re-evaluate lofty valuations. Despite the sell-off, some remain optimistic about AI-focused tech giants. Semiconductor stocks opened the third quarter on a weak note on Thursday, with several of the biggest winners from the AI rally witnessing sharp profit booking after a record-breaking run in the April-June period. The VanEck Semiconductor ETF (SMH), which tracks major chip stocks, fell more than 5%, a day after ending its strongest quarter on record. The index had surged 71% between April and June as investors aggressively bought companies expected to benefit from the artificial intelligence boom. US MarketsPowered By As on 02 Jul 2026, 10:12 PM IST S&P 500 Top Gainers Moderna77.60(7.03%) Boston Scientific45.66(6.03%) Universal Health Services159.00(5.59%) HCA Healthcare412.50(4.90%) Gainers" S&P 500 Top Losers CrowdStrike Holdings195.36(-74.72%) Teradyne374.51(-12.36%) KLA234.94(-11.74%) Corning198.90(-9.85%) Losers" Memory chip maker Micron led the losses, tumbling 11%, while Intel fell 9% and Advanced Micro Devices (AMD) declined 7%. The three companies together had added nearly $2 trillion in market value during the second quarter as investors broadened their AI bets beyond Nvidia, expecting rising demand for memory chips and central processors to support future growth. Selling pressure also spread to semiconductor equipment makers. Lam Research, KLA Corp. and Applied Materials, all of which more than doubled during the second quarter, fell at least 10%. The weakness came after reports suggested that Meta Platforms may rent out excess AI computing capacity, raising concerns that the rapid expansion of AI infrastructure could eventually lead to excess supply. The report fuelled speculation that AI computing capacity may be catching up with demand, prompting investors to reassess lofty valuations across the semiconductor sector. Interestingly, Meta's shares moved in the opposite direction, rising more than 9% after the development was viewed positively by investors. The company is among the largest spenders on AI infrastructure globally, investing billions of dollars annually in data centres and computing hardware. Analysts at KeyBanc Capital Markets said the move could help Meta expand into the enterprise AI market and generate quicker returns from its infrastructure investments. Despite Wednesday's sell-off, many market participants continue to remain constructive on large technology companies investing heavily in AI. Richard Saperstein, chief investment officer at Treasury Partners, said he continues to favour hyperscalers, arguing that their earnings growth remains strong even as valuations have moderated due to concerns over heavy capital expenditure. The sharp reversal highlights growing volatility in AI-related stocks after an extraordinary rally, with investors becoming increasingly selective as they look for clearer evidence that massive investments in AI infrastructure will translate into sustainable earnings growth.

Chip stocks selloff extends on valuation, Meta's pivot fears By Investing.com

Investing.com -- The Wednesday selloff in U.S. chip shares extended into Thursday's premarket trading as lofty valuations and heavy AI spending by tech companies weigh on investor sentiment. Shares in Micron and Western Digital fell about 2.1% each by 04:42 ET. Coherent and Marvell Technology shed about 2% and 1.8%, respectively, while AMD, Intel and Microchip Technology also edged about 1% lower. The moves followed a session in which U.S. stocks finished slightly lower on Wednesday as technology shares fell, though gains in Meta Platforms limited the decline in the S&P 500 and Nasdaq. Chipmakers were among the biggest drags on both indexes, with an index of semiconductors ending 6.3% lower and technology leading declines among S&P 500 sectors. Micron fell as much as 10.6% on Wednesday, while Applied Materials, Lam Research, Allegro MicroSystems and Intel each dropped more than 9%. "The strong and almost steady outperformance since last September of semiconductor stocks (i.e. AI chip and memory makers) vs. hyperscalers (i.e. AI cloud providers) appears somewhat unsustainable in the long run," said JPMorgan analyst Nikolaos Panigirtzoglou. Meta Platforms was an outlier, with its shares rallying 8.8% after Bloomberg News reported that the company is building a cloud business to sell excess AI computing capacity. According to Bloomberg, Meta is debating whether to offer access to AI models hosted on its infrastructure or to sell access to raw computing power. Model developers, including Meta, have been racing to secure computing power since OpenAI kickstarted the AI boom with the launch of ChatGPT in 2022, and demand has far outpaced supply. Meta told investors in April that it plans to spend as much as $145 billion on capital expenditures this year as it continues developing data centers and securing the graphics processing units needed to train AI models and run large workloads. By standing up a cloud business, Meta could generate revenue on capacity it isn't using, a welcome signal for investors who have been uneasy about the company's spending plans. The new business would also put Meta into a competitive market currently dominated by Amazon, Microsoft, Google and CoreWeave, among others. The latest bout of market volatility comes ahead of the key monthly U.S. jobs report, which is due out Thursday, with markets closed Friday ahead of the Fourth of July holiday.

Nasdaq sinks as AI worries hit chipmakers

July 7 (Reuters) - The Nasdaq ended sharply lower on Tuesday, weighed down by losses in Micron Technology and other chipmakers due to mounting doubts about the sustainability of Wall Street's AI-driven rally. Chip stocks in Asia and the United States dropped after memory chip giant Samsung Electronics' blowout earnings report failed to satisfy investors with sky-high expectations. Micron dropped 4.7% and Sandisk lost 7.3%. That helped send the PHLX chip index down 4.65%, reducing its 2026 gain to about 74%. Adding to worries about high-flying chipmakers, Reuters reported that Chinese startup DeepSeek is developing its own AI chip, a push that could reduce its dependence on Nvidia and Huawei chips. Tuesday's chip selloff marked the latest bout of volatility among memory chipmakers and other AI-related stocks as investors worry that sharp gains related to the buildout of AI data centers may have left the shares too pricey. "The story of today is the story of the last few weeks, and that's rotation after the blistering run in the AI buildout, semis and memory. Expectations have gotten to be almost impossible to beat for these companies," said Zachary Hill, head of portfolio management at Horizon Investments in Charlotte, North Carolina. Another test of the appetite for chip stocks looms on Friday, when South Korean giant SK Hynix's U.S. listing starts trading on the Nasdaq. Elon Musk's SpaceX fell almost 7% in its first day of trading as part of the Nasdaq 100 index, and after a wave of brokerages initiated coverage on the stock. Eight of the 11 S&P 500 sector indexes declined, led lower by industrials, down 3.41%, followed by a 2.45% loss in materials. The S&P 500 declined 0.45% to end the session at 7,503.85 points. The Nasdaq declined 1.16% to 25,818.69 points, while the Dow Jones Industrial Average declined 0.25% to 52,925.15 points. The Dow briefly hit a record high earlier in the session before losing ground. Despite the S&P 500's decline, advancing issues in the index outnumbered falling ones by a 1.3-to-one ratio. Oil prices rose following reports of attacks on vessels near the Strait of Hormuz. Fiserv climbed 1.8% after media reports that the firm had held discussions with U.S. banks including JPMorgan and Bank of America to sell its payments infrastructure business handling debit card transactions. U.S. Federal Reserve watchers will get another glimpse into how new Chair Kevin Warsh steers the central bank when it releases the minutes of its latest meeting on Wednesday, the first of his tenure. Volume on U.S. exchanges was relatively light, with 17.5 billion shares traded, compared with an average of 23.3 billion shares over the previous 20 sessions. (Reporting by Noel Randewich in San Francisco and Shashwat Chauhan and Avinash P in Bengaluru; Editing by Pooja Desai and Matthew Lewis) By Noel Randewich and Shashwat Chauhan

Asia chip stocks slide on OpenAI efficiency gains, Meta cloud plan reports By Investing.com

Investing.com-- Asian semiconductor stocks fell on Thursday, tracking a sharp overnight selloff in U.S. chipmakers after reports that OpenAI had achieved significant efficiency gains in running its artificial intelligence models and that Meta Platforms Inc (NASDAQ:META) was exploring ways to monetize excess AI computing capacity. Investor sentiment was hit by a report from The Information that OpenAI engineers had developed software optimizations capable of cutting inference costs by roughly half, reducing the number of Nvidia graphics processors needed to serve some ChatGPT users. Get real-time updates on market-moving news with InvestingPro The development raised concerns that future demand for AI chips could grow more slowly than previously expected. South Korea's heavyweight chipmakers Samsung Electronics (KS:005930) and SK Hynix (KS:000660) slumped between 8% and 10%. Japan's Advantest Corp (TYO:6857) shares dropped more than 7%, while Tokyo Electron (TYO:8035) (TYO:8035) shares declined 5%. Taipei-listed Taiwan Semiconductor Manufacturing Co (TSMC) (TW:2330) shares fell more than 2%. Adding to the pressure, a Bloomberg News report said Meta Platforms is developing a cloud business to sell excess AI computing capacity, a move aimed at generating returns from its massive AI infrastructure investments. Reports on Wednesday showed that Meta was considering offering customers access to AI models and spare computing power through a new cloud service. The twin developments sparked concerns that AI companies may be able to extract more value from existing hardware, potentially reducing the urgency for new chip purchases.

S&P 500 dips as AI worries hit chipmakers

July 7 (Reuters) - The S&P 500 dipped on Tuesday, weighed down by losses in Micron Technology and other chipmakers due to mounting doubts about the sustainability of Wall Street's AI-driven rally. Chip stocks in Asia and the United States dropped after memory chip giant Samsung Electronics' blowout earnings report failed to satisfy investors with sky-high expectations. Micron dropped over 5% and SanDisk fell almost 8%. That helped send the PHLX chip index down 4.4%, reducing its 2026 gain to 74%. Adding to worries about high-flying chipmakers, Reuters reported that Chinese startup DeepSeek is developing its own AI chip, a push that could reduce its dependence on Nvidia and Huawei chips. While the S&P 500 declined, most of the benchmark's 11 sector indexes rose, led by a 1.6% gain in energy. Advancing issues outnumbered falling ones within the S&P 500 by a 1.4-to-one ratio. Tuesday's chip selloff marks the latest bout of volatility among memory chipmakers and other AI-related stocks as investors worry that sharp gains related to the buildout of AI data centers may have left the shares too pricey. "The story of today is the story of the last few weeks, and that's rotation after the blistering run in the AI buildout, semis and memory. Expectations have gotten to be almost impossible to beat for these companies," said Zachary Hill, head of portfolio management at Horizon Investments in Charlotte, North Carolina. Another test of the appetite for chip stocks looms on Friday, when South Korean giant SK Hynix's U.S. listing starts trading on the Nasdaq. Elon Musk's SpaceX fell about 5% in its first day of trading as part of the Nasdaq 100 index, and after a wave of brokerages initiated coverage on the stock. The S&P 500 was down 0.27% at 7,516.76 points. The Nasdaq declined 0.64% to 25,954.35 points, while the Dow Jones Industrial Average was down 0.27% at 52,915.17 points. The Dow hit an all-time high earlier in the session but declines in heavyweights Caterpillar and Goldman Sachs weighed. Oil prices, however, rose on Tuesday following reports of attacks on vessels near the Strait of Hormuz. Fiserv climbed 2.4% after media reports that the firm had held discussions with U.S. banks including JPMorgan and Bank of America to sell its payments infrastructure business handling debit card transactions. U.S. Federal Reserve watchers will get another glimpse into how new Chair Kevin Warsh steers the central bank when the minutes of its latest meeting are released on Wednesday, the first of his tenure. (Reporting by Noel Randewich in San Francisco and Shashwat Chauhan and Avinash P in Bengaluru; Editing by Pooja Desai and Matthew Lewis) By Noel Randewich and Shashwat Chauhan

S&P 500 down, Nasdaq slides as AI chip worries persist

July 7 (Reuters) - The S&P 500 slipped and the Nasdaq dropped sharply on Tuesday, weighed by losses in chip stocks amid doubts over the durability of the AI-led rally despite robust Samsung earnings, while a report on China's DeepSeek making an AI chip also hit sentiment. Nvidia fell 1.8% after Reuters reported Chinese startup DeepSeek is developing its own AI chip, a move that could reduce its dependence on Nvidia and Huawei chips. Chip stocks tumbled across Wall Street and the Philadelphia SE Semiconductor index declined 5.5%, hitting a four-week low. Intel's shares sank 8.2%, while Micron fell 7.3%, making the companies among the top losers on the benchmark S&P 500. Samsung Electronics' shares sank in South Korea despite the company reporting a 19-fold jump in second-quarter operating profit and surpassing its combined earnings over the past three years. "The (Samsung) results were in themselves fundamentally good but it seems then to have a knock-on effect at general markets that once people start being negative about Samsung, that negativity extends across markets," said Michael Field, chief equity market strategist at Morningstar. Shares of chip companies have been some of the biggest winners of the AI trade so far this year amid hopes of insatiable AI demand, though concerns of the sector being overbought as well as profit-taking by investors have led to some volatility. Another test of the appetite for chip stocks looms later this week, when South Korean giant SK Hynix's U.S. listing starts trading on the Nasdaq. Elon Musk's SpaceX began trading as part of the Nasdaq-100 index and a wave of brokerages initiated coverage on the stock as an industry-mandated quiet period ended. Its shares declined 4.5%. Nine out of the 11 S&P 500 sectors were trading higher as chip weakness overshadowed advances elsewhere on Wall Street. Consumer staples and healthcare were the top gainers. At 09:58 a.m. ET, the Dow Jones Industrial Average rose 14.18 points, or 0.03%, to 53,070.09, the S&P 500 fell 25.30 points, or 0.34%, to 7,512.13, and the Nasdaq Composite lost 267.74 points, or 1.02%, to 25,853.42. The Dow, meanwhile, cruised to another intraday record as gains in consumer and healthcare names buoyed the blue-chip index. It crossed the 53,000-point mark on Monday for the first time ever. The index clocked its fifth 1,000-point milestone this year as receding oil prices on the back of easing Middle East tensions offered some support. Oil prices, however, rose on Tuesday following reports of attacks on vessels near the Strait of Hormuz. Fiserv climbed 3.5% after media reports that the payments firm had held discussions with U.S. banks including JPMorgan and Bank of America to sell its payments infrastructure business handling debit card transactions. Rivian dropped 13.3% after the electric-vehicle maker launched an offer to sell 75 million shares even as it forecast second-quarter revenue above analysts' estimates. Meanwhile, U.S. Federal Reserve watchers will get another glimpse into how new Chair Kevin Warsh steers the central bank when the minutes of its latest meeting are released on Wednesday, the first of his tenure. Declining issues outnumbered advancers by a 1.1-to-1 ratio on the NYSE and by a 1.79-to-1 ratio on the Nasdaq. The S&P 500 posted no new 52-week highs and no new lows, while the Nasdaq Composite recorded no new highs and no new lows. (Reporting by Shashwat Chauhan and Avinash P in Bengaluru; Editing by Pooja Desai) By Shashwat Chauhan and Avinash P

Nasdaq set to fall at open as DeepSeek's AI chip push rattles markets

July 7 (Reuters) - The Nasdaq was set to open lower on Tuesday amid declining chip stocks, with investors questioning the momentum of the AI-led rally despite Samsung's strong earnings, while a report on China's DeepSeek making its own AI chip also hit sentiment. Nvidia fell 1.5% in premarket trading after Reuters reported the Chinese startup is developing its own AI chip, a move that could reduce its reliance on Nvidia and Huawei chips. Memory chipmakers drove losses meanwhile, with Micron Technology down 4.7%, Western Digital off 6.3% and Sandisk losing 4.6%. Samsung Electronics' shares sank in South Korea despite the company reporting a 19-fold jump in second-quarter operating profit and surpassing its combined earnings over the past three years. "The (Samsung) results were in themselves fundamentally good but it seems then to have a knock-on effect at general markets that once people start being negative about Samsung, that negativity extends across markets," said Michael Field, chief equity market strategist at Morningstar. "This is the problem coming up to earnings season as well, that we're likely to see a lot of volatility. The markets are something on a knife-edge going into earnings season." Chip stocks have been some of the biggest winners of the AI trade so far this year amid hopes of insatiable AI demand, though concerns of the sector being overbought as well as profit-taking by investors have led to some volatility lately. Other chip-related stocks including Intel fell 3.3%. Marvell Technology also eased and was down 4.5% amid sectorwide weakness. Another test of the appetite for chip stocks looms later this week, when South Korean giant SK Hynix's U.S. listing begins trading on the Nasdaq. Elon Musk's SpaceX was set to begin trading as part of the Nasdaq-100 index on Tuesday and a wave of brokerages initiated coverage on the stock as an industry-mandated quiet period ended. Its shares were last up 0.4%. At 08:31 a.m. ET, Dow E-minis rose 156 points, or 0.29%, S&P 500 E-minis lost 8.25 points, or 0.11%, and Nasdaq 100 E-minis shed 247 points, or 0.82%. Dow futures bucked the trend as software plays Microsoft, Salesforce and IBM rose. The blue-chip index crossed the 53,000-point mark on Monday for the first time ever. The index clocked its fifth 1,000-point milestone this year as receding oil prices on the back of easing Middle East tensions have offered some support. Oil prices, however, rose on Tuesday following reports of attacks on vessels near the Strait of Hormuz. Fiserv climbed 5.5% after media reports that the payments firm had held discussions with U.S. banks including JPMorgan and Bank of America to sell its payments infrastructure business handling debit card transactions. Rivian dropped 10.7% after the electric-vehicle maker launched an offer to sell 75 million shares even as it forecast second-quarter revenue above analysts' estimates. Meanwhile, U.S. Federal Reserve watchers will get another glimpse into how new Chair Kevin Warsh steers the central bank when the minutes of its last meeting are released on Wednesday, the first of his tenure. Traders currently see at least one 25-basis-point rate hike on the cards this year, according to data compiled by LSEG. (Reporting by Shashwat Chauhan and Avinash P in Bengaluru; Editing by Pooja Desai) By Shashwat Chauhan and Avinash P

Global AI Stocks Tumble as Samsung Electronics Results Prompt Tech Pullback

U.S. chip stocks fell sharply premarket, extending the reach of a global wobble in artificial intelligence-related stocks following Samsung Electronics' preliminary second-quarter earnings. Despite recording a 19-fold jump in second-quarter operating profit, Samsung shares slid 6.9% in Korean trade. Higher profits and expectations that the memory chip maker will see even stronger earnings growth later this year weren't enough to spark a further run-up in the Seoul-based group's share price. Shares in Micron Technology and Intel fell 5.8% and 4.2%, respectively, in premarket trade. Applied Materials and Lam Research--both major suppliers to Samsung--each lost around 4.9% premarket. European AI stocks fell steeply in early trade. Amsterdam-listed ASML--whose grip on the supply of chip-making machines has made it Europe's most valuable company--fell 5.5%, wiping out around 34 billion euros ($38.9 billion) of market value. Chip makers STMicroelectronics and Infineon Technologies lost 5.2% and 5.8% respectively, while Dutch suppliers of semiconductor-making equipment BE Semiconductor and ASM International both fell around 5%. The moves follow sharp declines in Asian trade. Samsung's fall spread to SK Hynix, with the memory chip maker falling 6% ahead of its planned U.S. public offering later this week. The selling is "one of the classic characteristics of late-stage bull markets, when expectations begin to outrun fundamentals," Swissquote analyst Ipek Ozkardeskaya wrote in a note to clients. Tuesday's tech selling is the latest episode in a volatile period for AI-related stocks, as investors pause for breath after a historic surge saw parabolic stock market gains for chip makers and their suppliers. Samsung's value has more than doubled so far this year, while Micron has more than tripled. ASML shares are up 67% for 2026. "That is what happens when a bottleneck trade gets crowded: fundamentals stay strong, but earnings stop impressing because perfection was already priced in," Wellington-Altus strategist James Thorne wrote in a post on X.

Chip and AI stocks attempt a rebound, Asia leads the way

(updated: prices, experts and details) FRANKFURT/SEOUL/NEW YORK (dpa-AFX) - In Asian trading on Friday, chip stocks began to recover, a move that also spread to Europe. After the Nasdaq 100 in the US had headed into the extended weekend the day before still looking very weak, the AI beneficiaries that had recently plunged sharply in the Far East were able to post solid gains again at the end of the week. The intensity of the setbacks and the subsequent rebounds, however, points to immense investor jitters. Market observer Stephen Innes spoke of short covering by investors who had been betting on falling prices in chip stocks. In South Korea, he said, it showed "how quickly an overstretched rubber band can snap back when all market participants are positioned in the same direction". South Korea's Kospi jumped almost six percent on Friday, after having pulled back nearly 19 percent from the record high it set in mid-June. Shares of SK Hynix had recently lost more than 30 percent, and on Friday they recouped more than ten percent of that decline. Deutsche Bank expert Jim Reid also pointed to a sharp rise in Samsung Electronics after reports emerged of talks with AI platform provider Anthropic about manufacturing a customized AI chip. In Germany, the tailwind reached Infineon, with the stock up 1.4 percent. In the chip supplier and equipment space, the rebound at home was in some cases a bit more pronounced at Aixtron, Siltronic, Suss Microtec, PVA Tepla and LPKF. Shares of US industry giants such as Micron, along with the memory makers Sandisk and Western Digital listed in New York, were already in demand again by the end of the week in German Tradegate trading. In New York, the stock market is closed on Friday because of the upcoming celebrations marking the 250th anniversary of the USA. Most recently, fears have again grown that the AI-driven record rally was overdone, first because of concerns about rising cost pressure from higher chip prices, and then because of fresh worries that there could be excess computing capacity. Contributing to this the day before were speculations that the social media group Meta wants to resell it into the market. According to Helaba, talk of a possible AI bubble is making the rounds again. However, the regional bank concludes that the situation is "only at first glance suggestive of a bubble". The theme may have all the ingredients, equity market strategist Markus Reinwand says, but at most three of six criteria are met. "The most important indication of overheating in our view, namely an extremely high valuation, is not currently a concern in the technology sector". Investors should remain vigilant, Reinwand said. "Particularly in the areas that have so far benefited strongly from investments related to artificial intelligence, earnings growth should not simply be extrapolated", he cautioned. "In addition, it would be unusual if a technological revolution of this magnitude did not also lead to overinvestment and misallocations. At the overall market level, Reinwand said, sharply rising corporate earnings are necessary to justify valuations. But that is not a given. Over the medium term, however, he believes AI benefits will also reach other parts of the economy. Pimco economist Tiffany Wilding shares that view: "Over the long run, AI could be deflationary if it boosts productivity, expands effective supply and lowers unit labor costs"./tih/ag/jha/