South Korea's Kospi index surged above 9,000 on Monday, June 22, before falling sharply 10% the next day over fears about AI chip demand, a selloff echoed globally [1, 2, 3, 4]. On June 23, the Nasdaq 100 dropped 3.3%, marking its second worst day this year, with investors unsettled by doubts around the sustainability of AI chip demand [3, 4].

After a strong earnings report from chip maker Micron on June 24, some tech stocks briefly rebounded. However, selling pressure resumed by Friday, June 26, when the Kospi fell about 5.8%, prompting a trading halt [1, 2, 3, 4]. Also that day, Apple and Microsoft announced product price increases, citing rising costs driven by AI-related inflation [2, 4].

Investors are growing more selective about AI stocks, breaking from the earlier assumption that all would rise together. Market watchers noted the recent selloff reflects concerns over excessive positioning by investors, questions about future chip demand, interest rate policies, and inflation outlook [1, 3, 4]. Some South Korean ETFs hit leverage levels considered risky amid the volatile selloff [4].

AI growth momentum is shifting away from infrastructure providers such as chip and data center companies toward firms developing AI applications in sectors like biotech, robotics, and defense. Tech Money author 佩吉克 said, “As with previous tech revolutions, growth moves from infrastructure to applications. The winners capturing most internet economy value were Amazon or Google, not Cisco or Sun. For AI, growth is moving from chips and data centers to vertical integration with profitable AI models, including biotech, robotics, and defense companies. Investors must be cautious not to overpay for infrastructure concepts during this lengthy transition” [4].

Meanwhile, Alphabet’s stock has dropped 15% since its May 2026 peak, following an $8.5 billion fundraising and reports of key AI talent departures this month [4]. CaixaBank asset management CIO Manso urged diversified investments across geographies, strategies, and sectors to mitigate risks [4]. Virginie Maisonneuve, founder of Maisonneuve Global Advisors, said investors remain jittery amid doubts whether the vast AI investments justify current valuations [5].

The turmoil in AI and tech stocks continued into last Friday, June 26, with signs that investors are adjusting to a new landscape where not all AI-related shares will perform equally.