US and South Korean memory and chipmaker stocks, long outperformers, have
sharply reversed; many major names are in bear market, down over 20% from recent
highs as of Wednesday close. Reasons: Samsung reported record profit and
stronger guidance but shares were sold off as investors fretted that AI
infrastructure spending may be excessive. Geopolitical risk rose after Trump
suspended a US‑Iran memorandum, adding anxiety around AI trades; if conflict
persists and inflation worries return, AI‑exposed stocks could see further
downside. Sector rotation also pressures the group: with hyperscalers’ returns
lagging chipmakers, strategists including Morgan Stanley CIO Mike Wilson had
forecast a chip pullback and now expect funds to flow back into hyperscalers,
which look relatively cheap as chip stocks near prior highs.
