Semiconductor Stocks Plummet Amid Rising Concerns of Prolonged Downturn
New Chinese AI technologies and a strong listing by the country's largest memory chip firm are pressuring US semiconductor stocks. The sector has been experiencing a broader pullback, with investors growing concerned that it may enter a prolonged downturn.
Nvidia saw its market capitalization dip below Apple's after losing about $250 billion on Monday, while SanDisk's shares declined 11% and were the biggest loser on the S&P 500 index. The iShares Semiconductor ETF (SOXX) and the Roundhill Memory ETF (DRAM) fell 1.7% and 4.2%, respectively.
The news comes as China's AI industry appears to be gaining strength, with new AI models such as Moonshot AI's Kimi K3 and those by DeepSeek reportedly being nearly at par with frontier US models but at a fraction of their costs. Additionally, ChangXin Memory Technologies' debut on the Shanghai Stock Exchange saw its shares soar by nearly 470% on the first day.
Investors are awaiting quarterly reports from Seagate and SK Hynix for further insight into the sector's performance.