Micron, Intel shares crash up to 8% as Samsung fails to calm concerns over AI

Micron Technology shares fell more than 7% on Tuesday, while Intel crashed nearly 8% as investors turned cautious on semiconductor stocks, with strong earnings from Samsung Electronics failing to calm concerns that the AI-led chip rally may have run too far.

The selloff hit several chip names. Intel fell 3.3%, while Marvell Technology dropped 4.5% amid broader weakness in the sector. The pressure came after a sharp fall in Asian chip stocks earlier in the day, led by Samsung Electronics and SK Hynix.

Samsung shares tumbled 6.9% in Seoul even after the company forecast a 19-fold jump in second-quarter operating profit. The numbers beat expectations and marked a major recovery for the South Korean chipmaker, but investors were not impressed. The stock had already more than doubled this year before Tuesday’s fall, leaving little room for even a strong earnings surprise.

The weakness spread across South Korea’s market. The KOSPI closed down 4.9% after falling as much as 8.2% intraday. Circuit breakers were triggered during the session as volatility in semiconductor stocks intensified. SK Hynix, another major AI memory winner, also fell sharply.

The selloff showed a shift in investor mood. For most of the year, chip stocks have been among the biggest winners of the AI trade, helped by expectations of strong demand for memory, data centre chips and AI infrastructure. But after a powerful rally, investors are now questioning how much of that growth is already priced in.

Micron has been one of the companies seen as a beneficiary of rising memory demand from AI servers. High-bandwidth memory and advanced DRAM have become important parts of the AI supply chain, with investors betting that demand from cloud companies and chip designers will support pricing and margins. Tuesday’s fall suggests that the market is becoming more selective, even for companies tied to AI infrastructure.
Sentiment was also hit by a Reuters report that Chinese startup DeepSeek is developing its own AI chip. The chip is aimed at inference tasks and could reduce DeepSeek’s reliance on Nvidia and Huawei chips, Reuters reported, citing sources. The project is still at an early stage but reflects a broader push by Chinese AI companies to build more of their own hardware as US export controls limit access to advanced chips.That news added to concerns that the AI hardware market may become more fragmented over time. While demand for AI chips remains strong, investors are watching whether large AI companies and startups begin shifting towards custom chips, which could change the demand outlook for established suppliers.

The immediate trigger for the weakness, however, was Samsung’s market reaction. The company’s forecast showed that earnings are recovering sharply as memory prices improve and AI demand supports advanced chips. But the fall in the stock after such a strong forecast suggested that investors had already built in much of the good news.

Chip stocks have seen similar bouts of volatility in recent weeks as investors weigh strong near-term earnings against high valuations. The sector has benefited from massive AI spending by technology companies, but questions remain over how quickly that spending will translate into profits across the broader AI ecosystem.