After a year of soaring valuations, the AI-fueled stock rally hit turbulence on Friday as investors moved to lock in their gains.
World shares retreated, with the heaviest losses concentrated in Asia. According to BNN Bloomberg, traders sold off shares related to artificial intelligence to capture profits from recent rallies, dragging down markets in Japan and South Korea in particular.
South Korea was hit especially hard. Reporting on the slide notes that the country's favorite AI stocks fell again, pulling the Kospi index down 8%. Samsung Electronics and SK Hynix — which together account for more than half of the Kospi's market value — each dropped around 9% on Friday, forcing the exchange to trigger circuit breakers and temporarily halt trading.
The pullback follows what had been a banner stretch for the sector. Moomoo's 2026 mid-year recap describes a "massive boom" in storage and AI chips that powered the year's 10 biggest stock surges, underscoring how far these names had climbed before the reversal.
The picture among megacap names is uneven. Bloomberg argues the AI trade "still works, but it's getting harder," and that AI is splitting tech stocks into clear winners and losers. Not every giant has thrived: WEEX reports that Microsoft stock is down 24% in 2026, prompting debate over whether the dip is a buying opportunity, even as some forecasts ask whether MSFT could eventually reach $600.
Beneath the market swings sits a deeper question. As CBS News puts it, Big Tech is all in on AI — now it needs paying customers to justify the enormous spending and lofty expectations.
Why it matters: With AI-linked shares making up a huge share of major indexes, a wobble in this single trade can ripple across entire markets and ordinary investors' retirement accounts.