Chip Stocks Slip as AI Rally Faces Fresh Skepticism

Nvidia shares slipped 1.5% in early trading following reports that Beijing-based DeepSeek is developing its own AI hardware. This move signals a potential shift away from dependence on foreign chips, rattling a market that has relied heavily on Nvidia’s dominance. The contagion spread quickly to memory chipmakers: Micron Technology led the decline with a 4.7% drop, while Western Digital and Sandisk fell 6.3% and 4.6% respectively.

Even strong corporate performance failed to buoy the sector. Samsung Electronics reported a 19-fold surge in second-quarter operating profit, yet its shares retreated in South Korea as traders looked past the headline numbers. With the earnings season approaching, the discrepancy between massive growth and market reaction suggests that the AI sector may be overbought, leaving investors increasingly wary of further volatility.