The sell-off in chipmakers Micron Technology and SK Hynix intensified in Tuesday’s trade on October 13, amid growing concerns over competitive risks and the sustainability of the AI-led rally. Micron shares have dropped another 6% to an intraday low of $929, extending its losses for a second consecutive session.
SK Hynix shares, which had fallen 4% in the previous session, crashed another 4.4%, hitting their lowest level since late AugustMeanwhile, other major chip stocks, including Nvidia, Broadcom, Advanced Micro Devices (AMD), Marvell Technology, and Intel, were trading modestly higher after Monday's crash.

The accelerated selling in Micron and SK Hynix followed a report that Chinese rival CXMT had made progress in developing memory technology that the two companies are also working on. CXMT aims to introduce a new server memory product based on the architecture by the end of 2026, company president Cao Kanyu said at an industry event in Shanghai over the weekend.
The news came less than a day after Broadcom Inc. Chief Executive Officer Hock Tan said that many AI investors have little understanding of what they are betting on. The AI-led rally that propelled the Nasdaq to multiple record highs has also come under pressure as investor anxiety grows over its sustainability amid soaring valuations.

The sell-off was not limited to US stocks but also spread to other Asian markets. South Korea’s benchmark Kospi suffered a steeper decline, plunging more than 7% intraday and falling below the 6,000 mark before recovering some of its losses. The index ended Tuesday down around 5%.
Japan’s Nikkei 225 also dropped 1.8% to 67,777.52. With the S&P 500 nearly 120% above its 2022 low, the sustainability of the four-year bull market increasingly hinges on corporate earnings keeping pace with elevated valuations. Warnings over AI valuations mount Warnings about the AI trade are also mounting, with Broadcom CEO Hock Tan the latest to flag concerns.

Last week, billionaire investor Ray Dalio warned that AI was a “classic bubble” nearing a potential bursting point, citing rising interest rates and the need for investors to convert wealth into cash. The International Monetary Fund has also recently warned that sky-high valuations, rising corporate debt, and escalating cyber threats linked to the artificial intelligence boom pose heightened risks to global financial stability.
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