SK Hynix Profit Miss Deepens Global Retreat From AI Chip Stocks as Fed Decision Nears

A second consecutive day of selling in chip stocks widened into a broad move out of artificial-intelligence (AI) stocks after SK Hynix, the world's second-largest memory-chip maker, reported quarterly results far above its earlier performance that still disappointed investors. Operating profit reached 60.5 trillion won, an increase of more than 500 percent from a year earlier, but that figure came in roughly 6 percent below analyst expectations, according to the Financial Times. The company's shares fell about 10 percent, and Korean market reports described the reaction as driven by concern that the boom in memory-chip prices is closer to its end than its beginning.

The selling spread through the sector. Shares of Broadcom, Micron, Marvell and Intel fell in United States trading, and the Nasdaq Composite closed down 0.22 percent at 24,876.91 even as the Dow Jones Industrial Average added 537 points to 52,747.32 and the S&P 500 edged up 0.21 percent to 7,428.78, according to market summaries. Not every market moved the same way. In Mumbai the Sensex rose nearly 1 percent and the Nifty approached 24,200, helped by a firmer rupee and continued foreign buying, the Economic Times reported.

The selling comes as monetary policy turns more restrictive. The Federal Reserve concludes its two-day meeting today, and while investors expect no change at this meeting, futures now imply a quarter-point increase in September. A firmer dollar and rising rate expectations pushed gold down toward 4,000 dollars an ounce, with the metal trading near 4,036 an ounce and silver near 57.53, down about 1.5 percent. Bitcoin slipped to around 63,400 dollars, roughly 2.5 percent below the prior day, as risk appetite cooled ahead of the Fed.

From a sound-money perspective, the episode shows how much of the AI boom depends on credit-financed capital spending whose returns remain unproven. When a company can grow profit fivefold and still see its shares sold off, the market is repricing not the present but the assumed future stream of AI revenue. A central bank moving toward tighter policy raises the discount rate against which that future revenue is valued.