The Nasdaq 100 has officially crossed the correction threshold, dropping more than 10% from its recent peak as of July 28. The culprit: a brutal selloff in semiconductor and memory stocks that has investors questioning whether the AI spending boom is a feature or a bug.
Dell cratered 13%. Intel shed 7%. Several memory manufacturers fell roughly 10%. And that was just the US session.
The AI spending problem nobody wants to talk about
JPMorgan projects that hyperscalers, the cloud giants bankrolling the AI revolution, will spend nearly $870 billion on AI-related infrastructure by the end of 2026. That’s a 77% increase year-over-year.
The anxiety didn’t stay contained to US markets. Asian exchanges got hit even harder, with Samsung and SK Hynix both plunging more than 15%. The catalyst there was especially pointed: reports emerged that a Chinese state-backed company has begun mass production of chipmaking equipment, a development that threatens to reshape the competitive dynamics of the entire semiconductor supply chain.
