Technology stocks slide as AI infrastructure costs unsettle investors

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Technology stocks slide

Highlights

South Korea’s Kospi fell more than 8%, triggering a temporary trading halt.
Nasdaq Composite dropped 0.46%, its fourth straight decline.
Apple fell 6% after raising device prices because of higher component costs.
SoftBank slid more than 13% amid concern over a possible OpenAI IPO delay.

Asia takes the hardest hit

South Korea’s Kospi plunged more than 8%, while the small-cap Kosdaq lost more than 5%, prompting a temporary trading halt on the main index. The fall showed how heavily South Korea’s market remains tied to the AI trade, with semiconductor giants driving much of the move, CNBC reports.

SK Hynix dropped more than 10%, Samsung Electronics lost around 9%, and SK Square fell about 11%. LG Electronics declined 6.8%. Japan also came under pressure, with the Nikkei 225 down nearly 5%. SoftBank Group led the losses, sliding more than 13% after reports suggested OpenAI may delay its initial public offering until 2027, potentially postponing returns for one of its major backers.

The sell-off spread across the region. Japan’s Advantest fell more than 10%, Tokyo Electron declined more than 5%, Taiwan’s TSMC lost 1.88%, and Hon Hai slipped 2.91%. In Greater China, Tencent fell around 2%, Alibaba dropped 5%, Baidu lost nearly 4%, Xiaomi slid 3.5%, and SMIC tumbled more than 6%.

Apple reprices the AI boom

The pressure followed a mixed Wall Street session. The Nasdaq Composite fell 0.46%, marking its first four-day losing streak since February. The S&P 500 slipped 0.01%, while the Dow gained 71.72 points, or 0.14%, as investors rotated into healthcare, financial, and industrial stocks.

Apple lost 6% after raising prices on iPads, MacBooks, and home devices, citing higher component costs, including chips. Microsoft also dropped more than 3% after announcing higher Xbox prices because of rising component costs. Alphabet and Meta closed lower as well.

The concern is no longer just whether AI spending will continue. Investors are now asking whether higher memory and semiconductor prices could begin to squeeze margins at the largest technology companies.

AI trade faces a cost test

The latest sell-off marks a shift in the AI debate. Earlier in the year, investors focused on revenue growth from chips, cloud services, and data-center infrastructure. Now, the rising cost of that infrastructure is becoming a risk for companies that depend on large-scale hardware spending.

Micron’s strong earnings briefly reassured markets, while Qualcomm’s AI data-center outlook helped parts of the chip sector rebound. But Apple’s price increases and the sharp falls in South Korean chipmakers show that the rally has become more fragile.

Earlier, we reported that Micron shares surged premarket after earnings beat expectations.

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