Business Insider Samsung and other memory-chip makers are finding out that AI investors are getting increasingly difficult to impress.
- Memory stocks have slipped into a bear market after an eye-watering run higher in 2026.
- Investors are telling memory-chip makers that even their best might not meet expectations. Sign up for First Trade, Business Insider's daily markets newsletter.
Things have been changing quickly in the US lately.
The American soccer team went from national heroes to World Cup donkeys after some controversial presidential meddling and a lifeless performance against Belgium. The Iran war ceasefire went from foregone conclusion to uneasy standoff.
The same has been true in the AI trade. After a prolonged period of outperformance for memory stocks and chipmakers — especially relative to hyperscalers like Microsoft and Meta — that dynamic is rapidly reversing.
The comeuppance for the memory trade has been so swift, in fact, that as of Wednesday's close, many of its major players sat in bear-market territory, down more than 20% from recent highs.
Let's quickly take stock:
- South Korea's Kospi index: -20%
- Roundhill Memory ETF: -23%
- Samsung: -27%
- SK Hynix: -32%
- Sandisk: -26%
- Micron: -22%
To be fair, each of the individual stocks listed above are still up triple-digit percentages in 2026, while the Kospi is hanging tough with a roughly 70% year-to-date gain. But the speed of the reversal has investors wondering if this is the start of a deeper slide to come.
Here's what's been weighing on the space:
An AI company's best isn't always enough
Samsung — and, by extension, the rest of the memory-chip sector — found this out the hard way this week. Record profit and a blistering growth forecast weren't enough to win over investors, who dumped shares in what amounted to a "sell the news" event. Worries remain that companies are overspending on the AI buildout.
The episode secondarily highlighted the US market's growing sensitivity to Korean chipmakers, which, after a torrid start to 2026, have experienced some hiccups in recent weeks. That sensitivity will be tested anew on Friday, when SK Hynix begins trading on the Nasdaq following a record-breaking US ADR listing.
Geopolitical tensions are flaring
President Trump's latest calling-off of the US-Iran ceasefire exacerbated nerves around the AI trade. Traders have been pricing in a resolution — and looking favorably upon sinking oil prices — for weeks. If the conflict is prolonged, and inflationary worries start to creep back into investor psyches, the hottest parts of the AI trade could slide further.
A rotational snap back
As stock returns for AI hyperscalers fell behind memory-chip makers, a growing chorus of Wall Street strategists started calling for a reversion of the trend.
Mike Wilson, the CIO and chief US equity strategist at Morgan Stanley, was prescient with his Monday call for a chipmaker correction, and predicts a rotation back to hyperscalers. This conviction is shared by Ben Snider, his counterpart at Goldman Sachs.
All rotation arguments circle back to the same factor: valuations. As chipmakers test the upper bounds, some hyperscalers are looking downright cheap.
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