Nasdaq Drops 2.5% as AI Bubble Fears Slam Memory Chips
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- The Nasdaq Composite fell 2.5% shortly after Tuesday's opening bell, with the S&P 500 down roughly 1%, as AI bubble concerns weighed on the tech sector after months of chatter that hadn't yet inflicted lasting damage.
- South Korea's KOSPI dropped 10% overnight, dragged down by memory chip giants Samsung Electronics and SK Hynix, and that weakness cascaded into U.S. chip and storage names.
- Micron dove more than 10% in early trading, Sandisk plunged more than 12%, and Seagate Technology and Western Digital were each lower by roughly 8%.
- SpaceX, which went public less than two weeks ago at a $150 opening price, briefly traded below that level on Tuesday as investors weighed the rocket company's growing identity as an AI play tied to orbital data centers.
- Memory chip and storage makers had been among the biggest winners of the AI infrastructure boom, which drove unprecedented demand and soaring prices for products long seen as commodity inputs to laptops and phones — making them the sector with the most to lose in a reversal.
Why it matters: The memory chip and storage names that rode the AI infrastructure boom to record demand are now taking the market's hardest hits — Micron down 10%, Sandisk down 12%, Seagate and Western Digital each off roughly 8%. The article frames it as unclear whether this is a sustained correction or routine profit-taking, but the sector that powered the rally is now driving the selloff.
