SK Hynix shares tumbled 9.71 percent Thursday after reporting a record second-quarter operating profit of 60.54 trillion won ($41.8 billion) that missed consensus by roughly 5 percent.
The miss exposed a core problem for AI-hyped semiconductor names: even exponential profit growth fails to satisfy inflated expectations. The selloff dragged down the entire memory-chip complex. Samsung Electronics fell 6.13 percent, Kioxia dropped 8.84 percent, and South Korea's KOSPI index broke below 5,700. In Japan, SoftBank Group fell 4.36 percent, Tokyo Electron lost more than 5 percent, and Advantest declined 2.14 percent. Taiwan's TSMC, the world's largest contract manufacturer, was 1.46 percent lower.
The broader tech sector retreated. The Nasdaq fell 1.3 percent, the Russell 2000 dropped 1.3 percent, and the S&P 500 slid 0.7 percent.
Investors are reassessing the durability of the AI spending cycle. Disappointing signals from U.S. memory-chip earnings have reignited skepticism about whether hyperscalers will maintain their current capex intensity.
J.P. Morgan pushed back on that narrative Wednesday, saying the Asia tech selloff has not derailed the AI cycle. "Stepping away from the share price moves, we do not see any fundamental indicators that signal meaningful weakness in the next 6-12 months," the bank said, betting hyperscalers will sustain investment levels.
S&P Global's Aug. 5 report backed that view, noting global growth is being driven by AI and defense spending. The global purchasing managers index for tech equipment rose in July at its fastest pace since May 2021, and technology reported its fastest growth in ten months.
The whipsaw reflects the current state of the AI trade: Wednesday, SoftBank soared more than 13 percent. Thursday brought the reversal. For equity holders in memory chips and AI-adjacent names, the volatility is a reminder that valuations have priced in perfection—and perfection is elusive.
