Shares of Micron Technology slumped 13% in Tuesday’s trade, 23 June, falling to $1,055 apiece, amid a broader decline in chip stocks as investor concerns grew that the sector’s rally had gone too far, too fast, raising questions over valuations.
The rout in semiconductor stocks deepened after media reports suggested that SK Hynix is slowing the expansion of its AI memory chip production and shifting its focus towards lower-cost commodity DRAM products.
The reports triggered a 12% plunge in both SK Hynix and Samsung Electronics, dragging South Korea’s technology-heavy Kospi index down 10% and activating a circuit breaker, marking one of its sharpest intraday declines in recent years.
The sell-off in chipmakers, which have been among the biggest winners of the AI trade, also coincides with investors beginning to pull back from hyperscaler-linked stocks amid concerns over whether future returns can justify the massive capital expenditure currently being deployed.
Hyperscalers such as Amazon, , Google, and Microsoft have committed billions of dollars to expanding their AI infrastructure. However, investors are increasingly seeking clearer evidence that AI products and services can generate returns sufficient to justify such spending.
Meanwhile, growing expectations of a potential interest rate hike later this year also weighed on investor sentiment. Higher interest rates tend to pressure growth-oriented technology stocks, whose valuations are heavily dependent on future earnings expectations.
Since the artificial intelligence boom was ignited by OpenAI’s ChatGPT launch in late 2022, demand for semiconductor and memory stocks has surged dramatically, driving one of the strongest rallies in technology markets in recent history.
Micron Technology up over 800% in one year
Chipmakers, among the biggest beneficiaries of the artificial intelligence boom, have delivered triple-digit gains this year, with Micron Technology standing out even among the sector’s top performers.
The company’s share price has surged an impressive 884% (based on Monday’s close) over the past year, an extraordinary rally that pushed its market capitalisation above the $1 trillion mark.
Micron has also been this year’s best-performing stock in the Philadelphia Semiconductor Index, gaining more than 300% since January before Tuesday’s sharp decline.
The growing demand for artificial intelligence and data centre infrastructure has also propelled several global technology companies into the $1 trillion market capitalisation club. Samsung Electronics crossed the $1 trillion mark in May this year.
Similarly, SK Hynix surpassed the $1 trillion milestone in May 2026, driven by soaring demand for high-bandwidth memory (HBM) chips used in AI servers and data-centre applications.
(With inputs from Bloomberg)
Disclaimer: We advise investors to check with certified experts before making any investment decisions.