South Korean Chip Stocks Plunge as Nvidia Cedes Top Spot to Apple
A severe semiconductor selloff across Asia and Europe signals growing investor skepticism about AI hardware returns.
South Korean semiconductor giants SK Hynix and Samsung Electronics tumbled more than 10 percent on Tuesday, extending a selloff across chip markets in Asia and Europe. The decline reflects mounting anxiety over whether the AI-driven hardware boom can sustain record valuations.
Nvidia Dethroned
The volatility cemented a historic shift: Nvidia lost its position as the world's most valuable company to Apple in late July 2026. Apple's market capitalization reached approximately $4.9 trillion while Nvidia's fell to around $4.8 trillion, according to market data reviewed by The New York Times. The reversal marks a change in investor sentiment toward pure-play chipmakers versus companies integrating AI services more flexibly.
Year-to-date performance highlights the divergence. Apple shares have surged nearly 24 percent in 2026, while Nvidia has gained only about 4 percent. The contrast reflects growing scrutiny of the capital expenditures required to sustain AI infrastructure growth.
Manufacturing Headwinds
Nvidia faces additional pressure after delaying its next-generation Kyber NVL144 rack-scale AI system from 2027 to 2028. SemiAnalysis reported the setback stems from manufacturing challenges with the PCB midplane, a critical component for high-density AI hardware. The delay signals that physical production constraints may lag behind ambitious AI roadmaps.
Broader Concerns
The synchronized decline across South Korean, Japanese and European chip stocks points to systemic worries beyond any single company. Investors are increasingly questioning returns on heavy AI investments amid what analysts describe as "AI fatigue." Additional headwinds include geopolitical tensions, export restrictions on semiconductor sales to China, and concerns about circular funding practices within the AI industry.
The semiconductor sector faces heightened volatility as markets reassess whether extraordinary capital flowing into AI infrastructure will generate commensurate profits. For now, the rotation away from chipmakers toward companies with more diversified AI strategies appears to be accelerating.