Chip stocks face AI selloff

Kim Khan· Host0:00

[instrumental music] Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis. Good afternoon. Today is Tuesday, June twenty-third, and I'm your host, Kim Khan. Our top story so far, AI memory and chip stocks are facing a wave of selling as investors continue taking profits across the tech sector. South Korea's KOSPI index has slumped about ten percent from its recent record high. Samsung Electronics and SK Hynix each plunged about twelve percent in Seoul. SK Hynix came under pressure after a local report said it is slowing expansion of AI memory chip production to focus more on lower cost DRAM products. Meanwhile, Sandisk is down twelve percent, Western Digital has fallen ten percent, and Seagate Technology is off eight percent. The Philadelphia Semiconductor Index and the VanEck Semi ETF have each dropped about seven percent. Despite the sell-off, Wall Street analysts remain upbeat. Wedbush's Dan Ives said Micron's earnings report on Wednesday is creating additional nervousness around the memory chip trade, while technical factors are also weighing on stocks. But recent Asia checks and overall AI enterprise demand tracking have accelerated over the past few months and are showing no cracks in the armor, which continue to make us very bullish on owning the tech AI winners over the next coming year, Ives said. B of A also raised price targets on chip makers, including Intel, Arm Holdings, and Micron, saying visibility into AI-related spending now extends through twenty twenty-eight. The bank increased its estimate for the semiconductor total addressable market to two point seven trillion dollars,