• Nasdaq 100 futures drop 1% as global semiconductor stocks tumble, with South Korea's Kospi down 11%.
  • The selloff is driven by concerns over AI spending efficiency and rising competition from China.
  • Some strategists view the decline as a healthy correction within a longer-term AI growth trend.

Global Chip Rout Accelerates

US tech stocks are poised for another down day as a global selloff in semiconductor shares deepens. Nasdaq 100 futures fell about 1% in early trading, mirroring losses across Asia where chip-heavy indices led declines. South Korea's Kospi plunged 11%, dragged down by memory giants Samsung Electronics and SK Hynix, while Taiwanese and Japanese chip stocks also saw heavy selling.

The rout comes as investors reassess the frothy valuations in AI-related tech stocks, questioning whether massive capital spending on AI infrastructure will translate into commensurate returns. Rising competition from Chinese AI startups and potential trade restrictions are adding to the uncertainty.

"The market is taking a breather after an extraordinary run," said one strategist. "But this doesn't signal the end of the AI story—it's more of a rotation."

Broader Market Rotation

The selloff is not isolated to chip stocks. The tech-heavy Nasdaq is underperforming the broader market as funds rotate into sectors like healthcare and energy. The Philadelphia Semiconductor Index is on track for its worst week in months, with Nvidia, AMD, and Intel all falling in premarket trading.

Analysts note that the pullback follows a period of extreme concentration in AI stocks, which had pushed valuations to unsustainable levels. Despite the sharp decline, many remain bullish on the long-term demand for AI chips driven by data-center buildouts and enterprise adoption.

"We see this as a correction, not a reversal," said another analyst. "AI capex plans remain intact, and earnings visibility for top chipmakers is still strong."

What's Next?

Investors are now watching for any signs of stabilization in chip earnings or policy clarity on export controls. Key levels for the Nasdaq 100 and the Philadelphia Semiconductor Index will be closely monitored in the coming days.

Correction: An earlier version of this article misstated the drop in the Kospi. It is down 11%, not 10%.