The Nasdaq futures as of 2:40 PM Indian time are down 850 points, while the technology sub-index of the European Stoxx 600 index fell over 3% as well.
The rout was led by the KOSPI in South Korea, which fell 10% on Tuesday, triggering a circuit halt to trade as well.
This fall on the KOSPI came after a local media report stated that SK Hynix, one of the two major heavyweights behind the recent rally on the stock, is slowing the expansion of its AI memory chip production and shifting focus to the cheaper commodity DRAM.
As a result of the report, shares of both SK Hynix and Samsung Electronics plunged 12.5% each, triggering warning signs for US tech stocks as well, as investors rushed to book profits.
Despite this fall, shares of SK Hynix are up 277% for the year so far, while those of Samsung are up over 140%.
“Any headline that can be read as ‘AI-memory demand might be plateauing’ gets sold hard right now,” said Amanda Lyons, head of research at Energy Group Capital. “The vulnerability is in the positioning and the valuation, not in the buildout.”
The Nasdaq was an underperformer on Monday as well, ending 1% lower, dragged by Alphabet, which declined 5% after the exit of two high-profile AI division engineers, who quit to join rivals OpenAI and Anthropic.
While some analysts believe that such corrections are healthy and will provide entry points for other investors, some believe that the move in Korean stocks could be exaggerated due to heavy participation of retail investors.
SpaceX was the other major talking point on Monday with a 16% plunge, after the company proposed a $20 billion bond offering. The stock is now just 15% above its issue price of $135, having risen to a post-listing high of $225. Shares of Micron will also be in focus ahead of their results on Wednesday, with the stock having gained over 200% already so far this year.
