Asian stock markets dropped sharply as investors dumped technology shares that had soared during this year's AI-driven rally. Multiple outlets, including Yahoo Finance and The Washington Post, reported that the sell-off was driven largely by traders locking in profits after recent gains.
South Korea was hit hardest. According to the BBC, trading on South Korea's Kospi index was halted to prevent panic selling — the third such halt this week. Moneycontrol reported the Kospi fell as much as 8.2%, triggering a 20-minute trading halt, with chipmakers Samsung Electronics and SK Hynix each sliding more than 9%, while foreign investors sold $1.7 billion in Kospi shares on Friday. One headline from KXLY put the South Korean market's drop at 10%.
The Free Press Journal tied the chip selloff directly to "weakening sentiment around AI-driven chip demand." China was not spared either: Devdiscourse reported that falling AI shares dragged Chinese stocks to record lows.
The New York Times framed the broader move as "A.I. uncertainty" jolting tech shares across Asia. Crypto Briefing linked the global decline to AI demand concerns alongside reported delays to an OpenAI IPO.
The picture in the U.S. was more mixed. Business Standard reported that AI stocks rebounded even as Apple slid, leaving Wall Street uneven amid hopes for cooling inflation.
Why it matters: AI enthusiasm has powered much of this year's market gains, so a sharp reversal in the chipmakers at its center signals that investors are starting to question whether that demand can live up to the soaring valuations.