AI Stocks Slide as Nasdaq Drops 1.2% and Kospi Sinks 5.8% on Valuation Strain
Updated
Updated · CNN · Jun 26
AI Stocks Slide as Nasdaq Drops 1.2% and Kospi Sinks 5.8% on Valuation Strain
3 articles · Updated · CNN · Jun 26
Summary
The Nasdaq was set to fall another 1.2% Friday after South Korea’s Kospi dropped 5.8% and triggered a 20-minute trading halt, extending a weeklong AI-led tech sell-off.
Years of AI-driven gains are being challenged because valuations ran ahead of profits, while companies are still spending and borrowing tens of billions to build capacity.
Chip shortages have split the sector: Microsoft and Meta are down about 20% from their peaks, Apple fell more than 6% after raising device prices, while Micron jumped nearly 16% on strong semiconductor demand.
That volatility is already affecting deal appetite, with the New York Times reporting OpenAI is considering delaying its IPO because markets may not support its targeted $1 trillion valuation.
The broader risk is that higher bond yields and possible Federal Reserve rate hikes could deepen pressure on tech, even as non-tech sectors have helped keep the S&P 500 within just over 3% of its record.