Tech Stocks Plunge as AI Valuations Hit Nasdaq and Korean Market

AI‑driven tech stocks have been under pressure, causing the Nasdaq to fall more than 6% from its all‑time high set on June 2 and to be poised for another 1.2% drop on Friday. The decline follows a massive sell‑off in South Korea where the Kospi slipped 5.8%, triggering a circuit‑breaker that halted trading for 20 minutes.

The slump reflects inflated AI valuations that rely on promised technology rather than profit growth. Companies have spent tens of billions on AI development, driving a data‑center boom and a shortage of high‑performance chips. Chip scarcity forced Apple to raise MacBook and iPad prices, sending its shares down over 6%, while memory‑chip maker Micron surged nearly 16% after reporting strong earnings.

OpenAI is weighing a delay to its planned IPO because market volatility could jeopardise its target $1 trillion valuation. Analysts also warn that higher bond yields and the prospect of Federal Reserve rate hikes could further pressure the tech sector, which already accounts for about 19% of the S&P 500.