Global semiconductor stocks experienced a significant sell-off as concerns about the sustainability of the AI boom intensified. US chip and memory stocks extended previous losses, contributing to a dip in the Nasdaq 100. Companies like Sandisk, Western Digital, Micron, and Advanced Micro Devices saw substantial declines.

Asian markets were also affected, with South Korea's Kospi leading the way down after investors divested from chipmakers SK Hynix and Samsung Electronics. In Tokyo, the Nikkei 225 fell, and memory-chip maker Kioxia experienced a sharp drop, halving its share price this month. These declines follow a period where semiconductor stocks had driven market gains, fueled by expectations of benefiting from AI spending.

Concerns over funding uncertainties, capital expenditure increases, and Big Tech free cash flow have become prominent. This turbulence coincides with the second-quarter earnings season for tech giants. Meanwhile, advancements by Chinese AI companies, such as Moonshot's Kimi 3 model, have added to investor anxiety. Despite the sell-off, Apple briefly surpassed a $5tn valuation, signaling its role as a tech haven. Nvidia is reportedly committing up to $50bn to a new Texas data center.