Escalating fears that the artificial intelligence boom has become a bubble are battering major memory-chip and technology equities, with Kioxia Holdings and South Korea’s Kospi Composite Index extending steep declines. Kioxia shares fell to ¥13,500 on Monday, down more than 52% from this year’s high and erasing billions of yen in value, even as the SanDisk partner reported explosive growth: revenue jumped 415% year over year to ¥1.76 trillion in the June quarter, with operating margin reaching 75%. The company and SanDisk plan to invest $31 billion in Japan to expand capacity, and its next earnings report on October 30 is seen as a key catalyst.
Technical signals point to further downside for Kioxia. The stock has fallen from ¥37,580 in June to around ¥13,455, forming a bearish pennant pattern and trading below its 50-day moving average and Supertrend indicator. The RSI and MACD remain weak, and analysts see a potential move to ¥10,000 if the stock breaks below support at ¥11,990.
South Korea’s Kospi Index dropped to 5,463 points last week, down nearly 40% from its 2026 peak, as investors dumped Samsung Electronics and SK Hynix. Samsung has fallen more than 40% from its all-time high, while SK Hynix is down over 57% to 1.24 million won and SK Square has dropped 64%. The selloff has also hit US memory names including Micron, SanDisk and Western Digital. The AI Bubble Index has risen to 76, and prominent voices such as Ray Dalio and Michael Burry have warned that the bubble may burst soon. Gartner has cautioned that many large AI companies may need to announce billions of dollars in impairments by 2030, with neoclouds like CoreWeave and Nebius seen as most exposed. Additional negative signals include Firmus pulling its IPO, reports that OpenAI’s revenue was $20 billion below expectations, and weaker-than-expected third-quarter revenue from Anthropic.
Broader macro pressures are adding to the risk-off tone. Brent crude has climbed to $110 and West Texas Intermediate to $101 as tensions in the Middle East escalate, with Iran reportedly targeting ships near the Strait of Hormuz. The 10-year Treasury yield has jumped to a multi-year high of 5.3%, while the two-year yield has risen above 5%. The next major catalyst for South Korean markets is the central bank’s interest rate decision, with economists expecting rates to remain unchanged at 3.0%. Kospi technicals show the index below its 50-day and 100-day moving averages, with the ADX rising; key support sits at 5,272, and a break below could open the path to 5,000. While the reports focus on equities and AI infrastructure, the combination of AI bubble fears, rising yields and oil-driven risk aversion could spill over into broader risk assets, including cryptocurrency markets.
