Nvidia, Micron, AMD sink as SK Hynix results fail to impress, AI trade unwinds

Nvidia, Micron, AMD sink as SK Hynix results fail to impress, AI trade unwinds Ines Ferré · Senior Business Reporter Wed, July 29, 2026 at 5:46 PM GMT+2 2 min read SKHY ^SOX SKHY AMD MU What happened:  Semiconductor stocks declined on Wednesday as a record profit from memory maker SK Hynix ( 000660. KS ,  SKHY ) failed to lift the sector, further unwinding the AI trade. The PHLX Semiconductor Index ( ^SOX ) fell more than 3%, extending losses from the prior session.

AI chip heavyweight Nvidia ( NVDA ) stock dropped more than 2%, while peer AMD ( AMD ) fell roughly 5%. Memory and storage makers Micron ( MU ) and Sandisk ( SNDK ) dropped 5% and 7%, respectively. What's behind the move: SK Hynix reported a record second quarter operating profit, which rose 557% from a year earlier but fell short of lofty expectations, fueling investor concerns about whether AI-related spending can sustain its rapid pace.

The earnings miss reflected a less favorable product mix rather than weakening demand for AI memory chips. Management reiterated that demand is expected to outpace supply through 2030. The South Korean memory maker also said it plans to boost 2026 capital spending by roughly 50% to at least $31 billion as it ramps up AI memory production, raising investor concerns about potential overinvestment in AI infrastructure.

Barclays analysts cut their price target on US-listed stock to $300 from $330 following the results but still maintain an Overweight rating. Susquehanna analysts also cut their price target on the South Korean shares. What else you need to know: The move comes after SK Hynix tumbled more than 8% in the prior session amid concerns over rising competition, AI-related financing deals in the chip sector, and whether hyperscalers' massive AI investments will generate sufficient returns.

In Asia, investors once again  dumped chip stocks  such as Samsung ( 005930. KS ) and SK Hynix, driving the KOSPI Composite ( ^KS11 ) down nearly 6% on Wednesday. A strong debut from Chinese memory maker CXMT ( 688825.

SS ) in Shanghai this week also reignited concerns that expanding memory supply could pressure chip prices. Semiconductor stocks have been at the center of the artificial intelligence trade this year, helping push the sector to record highs in June. Since then, chip stocks have fallen sharply as investors question whether hyperscalers' enormous AI spending plans will translate into adequate returns.

Last week, Alphabet ( GOOG , GOOGL ) stock plummeted after the tech giant announced it would raise its capital spending outlook as it builds out its AI infrastructure. Investors are now focused on upcoming results from Microsoft ( MSFT ), Amazon ( AMZN ), and Meta ( META ), all of which are expected to announce further increases in AI-related spending. Story Continues Any hint of a slowdown, however, would spell trouble for the companies that make semiconductors and related equipment.

Concerns that the Federal Reserve could resume raising interest rates have also weighed on sentiment. Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre .