Chip stocks slide in US and Asia as AI jitters rattle investors

apparent

So is this good news for the companies that have taken a hit as AI stocks have climbed, and semiconductor shortages have rattled investors?

sandworm101

And now they will complain that they need loans guarentees due to a lack of equity to finance new investments. I await the announcement of fresh price rises. Every stick of DDR5 should come with a share, so future dividends go back to the people who financed this insanity.

elliotec

I'm cautiously optimistic that this is the beginning of a much needed correction toward sobriety with regards to AI investment. The macro effects of all the money going into AI are apocalyptic. Maybe we can take some deep breaths and move forward a little smarter if the hype fest slows down a tad. And if we're lucky, eventually be able to afford RAM again.

teaearlgraycold

Snap back to reality, ope, there goes gravity

crystal_revenge

I feel like I've seen this headline (followed a week later by its inversion) countless times in the last 6 months. I have little doubt this is a bubble, but also very little certainty as to when or how it will "correct". The KOSPI is almost not worth talking about as any serious signal. It has a circuit breaker drop almost weekly (again followed in no time with an equally high rebound) and basically has come to represent how insanely the South Korean market has become pure gambling (with retail investors absurdly leveraged). Sure , it's hard to image this doesn't lead to some disaster in the long run, but these fluctuations have become par for the course.

klodolph

I’m wondering if this is leveraged investors in KOSPI, where retail > institutional traders. More leverage = more volatility. If it actually IS a correction, I’m hoping that some of these data center projects, the ones that are REITs wearing a funny hat, can stop.

vatsachak

I think that a gpt 5.6 level model might sustain the growth. We're seeing talented users squeeze non trivial math and code out these tiers of models.

torginus

There is undoubtedly a bubble in the sense that AI is crazy overfinanced, and there's a semiconductor shortage - chip makers usually have like mid to low two digit margins for manufacturers of complex chips like NVIDIA, and single digit for ones commodities like memory. The fact that these companies are either selling these things at multiples of their previous prices, and even then, their P/E ratios are often 10,20,40 shows there's a bidding war for these chips. It's too much money chasing a fixed amount of product, and the only way to scale the industry is by scaling the entire supply chain, which is a long and expensive process, and certainly isn't fixed by throwing more money at companies. If existing hardware was sold at the usual margins, all this stuff would cost a tiny fraction of the current price. This is clearly a precarious position.

wanda

I do not work in finance, perhaps someone here can tell me if I have the wrong impression on the situation here: Tech giants with AI interests, hyperscalers, have used "special purpose vehicles" — shell companies — to quietly issue credit to AI companies, and these AI companies have used this line of credit to purchase/lease compute hardware/infrastructure primarily from their creditors, inflating the demand and price of said hardware. And much of the future infrastructure has yet to be constructed, and the hardware available now will at some point become obsolete or at least decrease in collateral value. But the credit doesn't actually come from the hyperscalers themselves, as it exceeds their actual cashflow, so it comes from investment banks and/or private investors/lenders... who actually absorb the majority of the risk then? And the big banks are currently offloading their loans at discounted rates, while simultaneously trading in swaps against hyperscalers? I presume the reason for the shell companies/private funding shadiness, is to keep debt off-the-record and perhaps avoid regulation / exceed risk tolerance limits. Just how exposed are the banks and the hyperscalers in all this?