South Korea’s popular chip stock SK Hynix fell sharply on Wednesday as falls in AI semiconductor stocks overshadowed investor enthusiasm ahead of the company’s Nasdaq listing later this week.
Bloomberg reported on Tuesday that despite demand for SK Hynix’s upcoming U.S. listing, the stock has fallen in line with semiconductor peers such as Samsung Electronics, which is several times oversubscribed.
SK Hynix shares closed down 5.7%, and Samsung Electronics closed down 6.3%. South Korea’s Kospi index fell by 5.4% due to declines in the index’s leading stocks.
Volatile trading in South Korean stocks reflected a broader risk-off mood as investors digested rising tensions between the United States and Iran and the U.S. government’s decision to rescind a waiver allowing new Iranian oil sales.
Japan’s Nikkei Stock Average closed 2.1% lower as of 2:49 a.m. ET, while crude oil futures rose more than 3%.
The loss came after hurting U.S. chip trading on Tuesday. Philadelphia Semiconductor Sector Index It fell 5% after its best quarter ever.
The market move highlights how quickly sentiment towards AI stocks has changed. The change comes even as SK Hynix continues to be one of the biggest beneficiaries of the boom thanks to its dominance in high-bandwidth memory chips used in NVIDIA’s AI processors. SK Hynix’s stock price has risen more than 200% this year.
Analysts say the company’s U.S. listing plan still makes strategic sense, even given the short-term volatility.
“A U.S. listing could broaden the investor base, improve liquidity and reduce valuation differentials with U.S. semiconductor peers,” Charu Chanana, Saxo’s chief investment strategist, said on Wednesday.
But the timing will test investor appetite amid growing doubts about the huge amounts of money being poured into AI infrastructure.
“This brings a large new block of AI-related stock supply to the market as investors question whether AI infrastructure stocks are overkill,” Chanana said.
He added that investors are now working on the next phase of the industry.
“That’s the key tension for investors,” she wrote. “The very things that make this sector so attractive right now – tight supply and strong pricing – are also driving the next wave of capacity.”