Global chip stocks plunge as investors question AI profitability

AI and semiconductor stocks triggered sharp volatility in U.S. and Asian markets as investors increasingly question whether the sector's massive valuations can be justified by actual profitability and returns. The week saw a chaotic sequence of selloffs, rebounds, and rotations into defensive sectors, driven by concerns that AI infrastructure spending may not deliver sufficient gains to offset the enormous capital invested. Major chipmakers, including NVIDIA and Intel, faced significant declines after a historic 130% rally over the past year, while South Korean indices like the KOSPI plunged nearly 10% intraday, impacting companies like Samsung and SK Hynix. This market turbulence reflects a fundamental shift in investor sentiment, moving from pure speculation on AI growth to a more cautious assessment of whether the technology can generate real economic value, prompting capital to flow into smaller stocks and non-tech sectors.