Semiconductor stocks, including Nvidia (NVDA), Micron Technology (MU), Advanced Micro Devices (AMD), Intel (INTC), and SanDisk (SNDK), all traded lower in pre-market trading on Wednesday at the time of writing. The sector remained under pressure after SK Hynix’s (SKHY) record quarterly results failed to impress investors, triggering another sharp sell-off in Asian chip stocks.
Summer Sale - Claim 70% Off TipRanks
Discover why XOVR identified Kalshi as an attractive private investment opportunity.Meanwhile, ongoing concerns about AI infrastructure spending and rising competition from China also weighed on sentiment.
SK Hynix’s Results Trigger Another Chip Sell-Off
The biggest drag came from SK Hynix, one of the world’s largest suppliers of high-bandwidth memory (HBM) chips used in Nvidia’s AI accelerators. The company reported record second-quarter revenue of 79.32 trillion won, up 257% from a year ago. Operating profit jumped 557% to 60.54 trillion won. However, both figures missed Wall Street’s expectations.
Investors were also disappointed by the company’s outlook. Management gave few details on shareholder returns or long-term contract pricing. It also said capital spending will rise to at least $31 billion this year as it expands production capacity. That raised fresh concerns about the rising cost of AI infrastructure.
The sell-off spread across the semiconductor sector because investors increasingly view AI chip makers as part of the same trade. As a result, weakness in SK Hynix weighed on other AI-related stocks, including Nvidia, Micron, AMD, Intel, and SanDisk.
AI Spending and China Remain in Focus
Investors are also questioning how long the AI spending boom can continue. Earlier this week, reports said Nvidia may help finance OpenAI’s next AI data center. The news raised concerns about the rising cost of AI infrastructure.
China is another concern. Memory chipmaker CXMT made a strong stock market debut this week. Investors also reacted to reports that China is making progress in chipmaking equipment. Together, the developments raised fears that Chinese chipmakers could expand production faster. That could increase supply and put pressure on memory-chip prices.
Investors will now watch earnings from Microsoft (MSFT) and Meta Platforms (META). They will also look for the Federal Reserve’s policy decision. Strong comments on AI demand could improve sentiment. However, higher AI spending and weak guidance could keep pressure on semiconductor stocks.
Wall Street’s Take on These Chip Stocks
According to TipRanks’ Stock Comparison Tool, Nvidia, Micron, SanDisk, and Advanced Micro Devices have Strong Buy consensus ratings. SK Hynix is rated Moderate Buy, while Intel has a Hold rating.
At the same time, SK Hynix offers the highest analyst upside at 153.51%, followed by Micron at 91.25% and SanDisk at 87.25%.
