Chip Stocks and the AI Trade: Nvidia to SK hynix — 2026-10-18
Global semiconductor stocks faced a severe correction this week driven by AI funding worries and fears of a memory oversupply in 2029, with SK Hynix and Samsung Electronics suffering double-digit weekly declines. Despite the sell-off, TSMC reported record Q3 revenue and reiterated that AI chip demand far exceeds current supply capabilities, while analysts debate whether current valuations for Nvidia and Micron have reset to post-dot-com crash levels.
Chip Stocks and the AI Trade: Nvidia to SK hynix — 2026-10-18
Top developments
Global Tech Rout Hits SK Hynix and Samsung Hardest
On October 15, a deepening sell-off in global technology hardware stocks led to significant losses for key Asian semiconductor players, with SK Hynix and Samsung Electronics shares dropping sharply amid concerns over AI infrastructure funding sustainability. The drop was part of a broader rout that saw investors fleeing to bonds and other sectors for safety, with memory stocks identified as particularly vulnerable due to fears of Chinese capacity expansion and a potential oversupply cycle starting in 2029.
TSMC Reports Record Q3 Revenue, Reaffirms AI Demand
TSMC reported Q3 revenue of NT$1.49 trillion, beating forecasts, with net profit expected to surge 64%, driven by robust AI chip demand. During its earnings call on October 15, TSMC Chairman C.C. Wei stated that the gap between AI chip supply and demand remains significant with no signs of slowing, a statement that prompted multiple foreign analysts to raise their price targets for the stock, with Macquarie hitting NT$4,410 and Citi at NT$4,000.
Valuation Reset: Nvidia and Micron Trade Like Post-Crash Cisco
Bank of America analyst Vivek Arya noted that Nvidia, Broadcom, and Micron are currently trading near 13x forward earnings, a valuation multiple comparable to Cisco Systems following the dot-com crash. This analysis suggests that despite the recent volatility, the market may have already priced in significant downside risks, potentially creating a value entry point for long-term investors if AI demand continues to materialize as expected.
SK Hynix Projects 20x Growth in AI Infrastructure by 2030
At the 2026 Semiconductor Exhibition in Seoul on October 14, Ahn Hyun, head of R&D at SK Hynix, stated that the performance scale of AI infrastructure could expand approximately 20-fold by 2030 due to growing AI inference demand. This long-term outlook contrasts with short-term stock pressure but highlights the structural growth thesis underpinning the company’s massive capex investments in HBM capacity.
Local view
South Korea: Local media reported that foreign investors have been aggressively selling Samsung Electronics and SK Hynix, with SK Hynix shares falling approximately 25% in one week, driven by concerns over Chinese memory tech catching up and US AI investment slowdowns. However, financial news outlets note that while foreigners dumped $14 trillion KRW worth of the "chip duo," they simultaneously bought into semiconductor supply chain stocks (substrates, packaging, equipment) and shipping/shipbuilding sectors, indicating a sector rotation rather than a total exit from tech-related exposure.
Taiwan: Taiwanese markets saw foreign investors selling TSMC shares for the 8th consecutive day, dumping 22,000 lots on October 16 alone, even as the company posted record EPS of NT$29.43. Local commentary highlights a disconnect between strong fundamentals (TSMC raising full-year revenue guidance to >44% growth) and market sentiment, with the "National Team" (state-backed funds) stepping in to support the stock, buying NT$6.6 billion worth to stabilize the index.
Context & numbers
- TSMC Q3 Performance: Revenue of NT$1.49 trillion (record high), with EPS of NT$29.43 (+68.7% YoY). Full-year USD revenue growth guidance raised to over 44%.
- Stock Declines: SK Hynix shares fell ~24-25% in the week leading up to Oct 16; Samsung Electronics fell ~17% in the same period.
- Valuations: Nvidia, Broadcom, and Micron trading at ~13x forward earnings, comparable to post-dot-com Cisco.
- Capex: SK Hynix and Samsung are investing
54 trillion KRW ($39B USD) in new HBM fab capacity, including Yongin Y2 and Cheongju M17 facilities.
On the radar
- Q4 Guidance Watch: Investors are scrutinizing Q4 revenue guidance from TSMC ($50.0B ± $1.0B) and ASML (€11.0-12.0B) to see if the "AI supercycle" narrative holds despite current stock volatility.
- HBM4E Timeline: Volume production of HBM4E is expected in calendar 2027, with HBM4 currently in high-volume shipments for lead customer platforms. This timeline will be critical for SK Hynix and Samsung’s competitive positioning.
- Japan Semiconductor Rebound: Following the global rout, Japanese chip equipment stocks like Advantest and Tokyo Electron saw buybacks on October 16 as US chip stocks stabilized, suggesting potential volatility arbitrage opportunities in the sector.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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