The AI market, which includes semiconductors and memory, is showing signs of weariness as investors reassess whether the extraordinary boom in chip and data center spending can be sustainable.
Semiconductor and memory stocks such as Micron Technology (MU) and Sandisk (SNDK) came under heavy pressure on Tuesday, after Samsung Electronics (005930) reported record second-quarter profits but missed revenue estimates.
Shares still fell nearly 7%, extending a broader sell-off among AI-related chipmakers. Concerns are growing that hyperscalers could slow down spending on AI infrastructure.
Meanwhile, rival SK Hynix is down 25% from its all-time high ahead of its U.S. listing this week, a deal that also draws investor capital away from existing chip stocks.
This weakness comes after a spectacular rally in AI infrastructure stocks this year, with Sandisk up more than 525%, Micron up more than 120% and SK Hynix up around 225% in 2026.
Adding to this shifting narrative, Chinese company Zhipu AI, one of the country’s leading artificial intelligence startups, is exploring a custom AI chip as demand for its open-source GLM models increases, highlighting the rise of lower-cost AI ecosystems built around domestic hardware rather than cutting-edge U.S. chips.
The move comes just weeks after SpaceX’s blockbuster IPO and amid high valuations for AI-related stocks. Investors are increasingly wondering whether the next phase of AI will require ever more GPUs and high-bandwidth memory, or whether more efficient models will reduce demand for the infrastructure that has fueled AI’s rally.
Over the past year, bitcoin and the broader crypto market have suffered from AI trading, and if investor enthusiasm for AI continues to fade, crypto bulls could see capital flow back into digital assets.
