Semiconductor stocks extend losses as SK Hynix’s $31 billion spending plan fuels concerns over AI demand sustainability.
SK Hynix shares fell sharply after the company announced a 50% increase in capital expenditures to at least $31 billion this year. The move aims to meet rising demand for memory chips driven by the AI boom, but investors reacted negatively amid broader sector weakness.
The Philadelphia Semiconductor Index has dropped 18.9% in July, marking its worst monthly decline since 2008. All stocks in the index now trade below their 50-day moving averages for the first time since April 2025, signaling deepening bearish sentiment.
Sandisk shares plunged 17% on Tuesday, extending a 30% five-day loss and nearing a 24% drop to its 200-day moving average at $832. Analysts warn the sector may be oversold as doubts grow over the longevity of AI-driven spending.