South Korean stocks tumbled on Friday as weak U.S. technology earnings revived concerns that massive AI investments may be outpacing near-term returns.
Seoul-listed shares of tech giants SK Hynix Inc. (NASDAQ:SKHY) and Samsung Electronics Co. (NASDAQ:SSNLF) closed 7.08% and 3.02% lower, respectively.
The Korea Exchange activated a sell-side sidecar — a temporary trading curb — for the benchmark Korea Composite Stock Price Index (KOSPI). Program trading in KOSPI-listed shares was suspended for five minutes beginning at 10:04 a.m. KST after KOSPI 200 futures fell 5.12%. The exchange triggers the measure when the KOSPI 200 Futures Index falls at least 5% for one minute. It marked the first intervention of its kind in 11 trading sessions, according to Korea Herald.
KOSPI closed 3.48% lower at 5,730.74 on Friday. Meanwhile, the sell-off spread to the Japanese market, with Nikkei 225 closing 2.12% lower at 63,290.11.
AI Sell-Off Puts Korean Chipmakers In Focus
Alphabet Inc.‘s (NASDAQ:GOOG) (NASDAQ:GOOGL) 12.29% stock plunge on Thursday after heavy AI investments pushed free cash flow into negative territory, alongside further weakness in Amazon.com Inc. (NASDAQ:AMZN) and Intel Corp. (NASDAQ:INTC) shares following earnings, fueled concerns over the sustainability of AI spending. NASDAQ closed 1.38% lower at 26,184.72 on Thursday.
The sell-off has put Samsung and SK Hynix under scrutiny, highlighting their growing exposure to sustained data-center expansion and AI-driven memory demand, despite recent signs of strong chip demand.
Earlier this week, SK Hynix reported third-quarter operating profit of KRW 83.33 trillion ($62.55 billion), a 632% year-over-year increase, exceeding analyst expectations.
The following day, Samsung Electronics reported third-quarter operating profit of KRW 107.4 trillion ($80.52 billion), nearly nine times higher than a year earlier. However, the result narrowly missed estimates.
Earlier this week, China’s AI stock sell-off has wiped out roughly $480 billion in market value in less than four months, with the STAR50 index plunging 40% from its June peak after reaching nearly 250 times trailing earnings. The broader CSI 300 has entered bear-market territory, falling 20% from its June high, as Chinese equities have lost $3.5 trillion since May.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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