Investors heavily exposed to AI suppliers start the week on a nervous note. South Korea’s KOSPI entered correction territory of -10%, then a 20% drop for a bear market. Memory suppliers are the companies that investors are watching closely.
Samsung (SSNLF) and SK Hynix (SKHY) account for a record 50%-60% of Asia’s KOSPI index. Retail investors account for most of the volatility after foreign investors lowered their exposure. Speculators thought that SK Hynix would rise by more after its inclusion in the U.S. exchange. Instead, SKHY stock peaked at $194.80, closing at $154.03 last Friday.
Micron Technology (MU), which enjoyed profit margins of 84.6% last quarter, tracks those memory stocks closely. However, Marvell Technology (MRVL) erased the June/July rally by closing down by 32.29% in the last month to $188.68. Investors also dumped Western Digital (WDC), Seagate (STX), and SanDisk (SNDK).
Software Sales Slump
IBM (IBM) elevated market fears when it said that customers allocated its budget for AI hardware. Instead of spending on consulting and IBM AI software, they bought GPUs and memory at rising prices. The steep inflation in hardware prices hurts corporate customers' spending power. Software firms like Oracle (ORCL) also dropped, while Salesforce (CRM), Adobe Systems (ADBE), and Autodesk (ADSK) continued to rebound in the last week.
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