A selloff in Korean semiconductor shares accelerated a broader decline in global technology stocks Monday, as investors questioned whether artificial intelligence infrastructure spending can justify valuations that lifted indexes for two years. SK Hynix led memory-chip declines, with U.S. names including Micron and SanDisk falling in tandem.

The Nasdaq Composite dropped more than 2 percent before stabilizing Tuesday, as strategists debated whether the move represented healthy profit-taking or the start of a deeper correction in AI-linked equities.

Immediate Catalysts

SK Hynix, a primary supplier of high-bandwidth memory for Nvidia accelerators, fell on concerns that hyperscaler order growth may slow after a frenzied build cycle. Traders cited rumors of order pushouts, though neither SK Hynix nor major cloud customers confirmed changes to 2026 delivery schedules.

Leveraged ETFs tracking semiconductor baskets amplified moves, forcing mechanical sales as volatility spiked. Korean regulators said they monitored foreign outflows but saw no evidence of coordinated short campaigns.

Valuation Debate

Bulls maintain inference workloads will expand token demand faster than training alone, sustaining memory and GPU shipments into 2027. Bears point to rising debt issuance among hyperscalers and the SpaceX post-IPO reversal as signs that capital markets are reassessing risk premiums on anything labeled AI.

Sanctuary Wealth chief investment strategist Mary Ann Bartels said on Bloomberg television that the trade may be "overdone" relative to near-term earnings but acknowledged concentration risk: a handful of megacap names drove disproportionate index returns in 2026.

Sector Spillovers

Power and cooling suppliers that rallied on data-center buildouts gave back gains. Software names with AI narratives but smaller revenue exposure fell despite no direct memory linkage, indicating sentiment-driven selling.

Bond markets showed calmer reaction; investment-grade tech spreads widened only marginally, suggesting credit investors still distinguish between cash-generating cloud platforms and speculative issuers.

What Watchers Expect

Second-quarter earnings from Nvidia, Microsoft, and Amazon in July will test whether the selloff anticipates fundamentals or merely resets multiples. Memory pricing data from TrendForce in coming weeks will show whether spot DRAM markets confirm supply loosening.

For portfolio managers, the episode reinforces diversification into power infrastructure and profitable software while treating pure AI narrative stocks as higher-beta positions sensitive to any hint that capex curves flatten.