SK Hynix shares tumble as global chip selloff deepens

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SK Hynix shares tumble

Highlights

SK Hynix shares fell 14.65% in Seoul.
Investors sold AI chip stocks after strong gains.
High valuations added pressure to the shares.
The Nvidia deal failed to calm the market.
Long-term demand for HBM chips remains strong.

SK Hynix shares closed 14.65% lower at 1,550,000 won on the Korea Exchange, marking one of the company's steepest single-day declines this year. The selloff followed another weak session for US semiconductor stocks and reflected a broader retreat from artificial intelligence-related investments, CNBC reported.

Investors lock in gains despite strong fundamentals

SK Hynix has emerged as one of the biggest beneficiaries of the AI boom thanks to its dominance in high-bandwidth memory (HBM), a critical component used in Nvidia's AI accelerators and next-generation data centers. That leadership helped drive the company's shares to record levels earlier this year.

Tuesday's sharp correction suggests investors are becoming more selective after the prolonged rally. Analysts point to profit-taking, elevated valuations, and growing uncertainty over the pace of future AI spending rather than concerns about the company's competitive position.

Market sentiment was also pressured by expectations that memory chip prices may approach a cyclical peak over the coming years. While demand for AI hardware remains robust, investors increasingly question how long extraordinary pricing conditions can be sustained.

Massive Nvidia agreement fails to support the stock

Only days before the selloff, SK Hynix announced one of the largest commercial agreements in its history, reinforcing its central role in the global AI ecosystem.

The company signed long-term supply contracts valued at $750 billion to provide advanced memory chips for Nvidia and other US technology companies. Nvidia said approximately $500 billion of those commitments relate directly to AI infrastructure projects planned through 2027, securing future supplies of high-bandwidth memory for next-generation AI systems.

Despite the scale of the agreement, the announcement failed to change investor sentiment. Many traders viewed the contracts as consistent with expectations already reflected in SK Hynix's valuation, choosing to reduce exposure rather than add to positions after the stock's strong performance this year.

Focus shifts from growth to valuation

The latest selloff illustrates that even market leaders are not immune when investor expectations become increasingly demanding. SK Hynix remains one of the world's largest producers of HBM chips, with Nvidia relying on its advanced memory for AI accelerators powering hyperscale data centers.

For investors, the next phase will depend less on headline contract announcements and more on whether AI infrastructure spending continues to justify current valuations. As cloud providers expand their computing capacity, SK Hynix remains well positioned to benefit, but the recent volatility suggests markets are entering a more cautious stage of the AI investment cycle.

We also reported Samsung and SK Hynix plan massive AI chip investment in South Korea.

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