(Bloomberg) -- South Korean stocks plunged, dragged by the nation's memory chipmaking powerhouses as investor sentiment continues to worsen on the artificial intelligence boom.
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The benchmark Kospi declined as much as 7.6%, to the lowest level since April 20. Shares of SK Hynix Inc. slumped 11% while Samsung Electronics Co. tumbled more than 9%.
The losses point to deepening concerns over crowded equity positioning and rising corporate debt levels as the AI buildout progresses. Nvidia Corp.'s fresh round of deals worth more than $750 billion has helped trigger worry over artificially inflated demand for AI.
"The recent selloff in semiconductor stocks appears to be driven more by a sharp deterioration in market sentiment than by any immediate change in fundamentals," said Jung In Yun, chief executive officer at Fibonacci Asset Management Global. "Investors are increasingly questioning whether the pace of AI infrastructure spending can be sustained."
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