Tech stocks tumble as chip makers' losses raise AI investment doubts

Shares of leading semiconductor producers have dropped sharply, sparking concerns that the recent surge in artificial-intelligence investment may be losing momentum. Korean firms SK Hynix and Samsung saw their stock prices fall 46% and 35% over the past month, though both remain up several times their levels a year earlier. The declines follow a broader pullback in AI-related equities, including brief dips in Google and Tesla after they announced additional AI spending.

Investment analysts note that while the AI sector has generated substantial gains, the rapid rise in demand for specialised chips may be unsustainable. "There is still a healthy degree of scepticism about the ability of these investments to generate a commensurate level of return," said Russ Mould, an investment director at AJ Bell.

Despite the pullback, some investors remain optimistic. Eileen Burbidge, a prominent tech investor, said the market has not yet experienced a full correction. Meanwhile, Apple’s shares rose 21% in the last month, helping it regain the title of the world’s most valuable company, while SpaceX’s stock slipped 14% since its market debut.

The broader market reflected the shift, with the FTSE 100, often described as an "anti-tech" index, briefly reaching a record high as technology-heavy stocks fell. Analysts also point to emerging risks, such as a reported breakthrough by a Chinese firm that could increase domestic chip production, and growing regulatory scrutiny of data-centre construction due to environmental concerns.