Overnight US stocks | Asian technology stocks continue to fall with chip stocks! SK Hynix falls more than 10%, Samsung Electronics falls over 8%.

The overnight selling of chip stocks in the United States spread to Asian markets, causing a collective drop in Asian chip stocks on Thursday. Among them, SK Hynix's stock listed in Seoul plummeted by over 11% at one point, completely erasing the previous day's 8% gains, and was still down over 10% at the time of writing. Earlier this week, the stock recorded its largest single-day drop, partially due to concerns about the outlook for artificial intelligence (AI) spending, prompting investors to take profits. At the same time, Samsung Electronics fell more than 8%, Seoul Semiconductor dropped over 5%, LG Innotek fell around 1%, and Samsung SDI dropped over 2%. The weakness in chip stocks quickly spread to the entire Asian region. In Japan, AI-related equipment manufacturer Advantest's stock fell by over 6%, SoftBank Group dropped by nearly 7%, Tokyo Electron fell by over 5%, and Renesas Electronics dropped by 4%. The decline in Asian chip stocks follows the overnight selling trend in the US semiconductor sector. Micron Technology, Inc. saw an 8% drop in its stock price, Intel Corporation fell by over 4%, and Lam Research Group and AMD both dropped by around 3%. Roland Burk, semiconductor and infrastructure stock research director at Futurum Group, said, "Today's decline mainly reflects the continuation of the trend in the US market overnight." He pointed out that news of New York State considering suspending data center construction, as well as reports that CoreWeave is considering hedging against possible future memory price declines, have had a slightly negative impact on market sentiment. New York Governor Kathy Hochul ordered a temporary halt to new large data center projects on Tuesday until the state establishes stricter regulatory standards for data center energy consumption, water use, and environmental impact. US President Trump publicly criticized Hochul's decision to suspend approval for new large data centers on Wednesday, calling the policy a "bad decision," and urged New York State to immediately lift the ban. The debate between the two over AI infrastructure development and energy costs escalated further. However, Burk stated that the recent market weakness more reflects profit-taking after significant gains rather than a deterioration in industry fundamentals. He added that the structural demand for AI infrastructure and storage chips remains intact. It is worth noting that as the chip stock sell-off occurred, ASML Holding NV ADR had just announced strong earnings. The Dutch chip equipment manufacturer raised its full-year sales guidance for the second time this year, expecting annual revenue to reach 43-45 billion, higher than analysts' expectations, and announced plans to further expand extreme ultraviolet (EUV) lithography machine capacity. Louis Condradjev, a trader at XFunds, said that the recent pullback reflects that semiconductor sector trades have become too crowded amid the ongoing AI boom. He expressed, "Currently, the semiconductor sector alone accounts for about 20% of the S&P 500 index, a weighting that is difficult to sustain in the long term." He pointed out that during the 2000 Internet bubble period, the semiconductor sector's weighting in the S&P 500 index was only slightly above 8%, while the historical average typically ranges from 2% to 5%. He also noted that while corporate profit growth momentum remains strong, the rally may become increasingly difficult to sustain in the future as investors reassess overvalued levels. He said, "Profit growth momentum has been very strong, but mainly concentrated in the semiconductor industry, and as valuations gradually return to reasonable levels, this growth momentum may begin to slow." Additionally, the latest Fund Manager Survey report released by Wall Street financial giant Bank of America Corp shows that global investors who are aggressively buying stocks should consider actively reducing exposure to risky assets. The core judgment of Bank of America's strategy team is not that the fundamental outlook for global technology stocks or AI compute industries is about to enter a downward trajectory, but that investor extreme bullish sentiment, rising stock positions, strong profit expectations, and continued valuation expansion have severely overdrawn the future 1-2 year fundamental growth prospects, leading to a significant deterioration in the marginal risk-return profile of risky assets, reflected in the extreme low cash levels of fund managers dropping from 4.1% to 3.6%, and a pessimistic score of 9.4 out of 10 in the bull-bear indicator. Therefore, Bank of America Corp strategist Michael Hartnett's team at Bank of America Corp, known as "Wall Street's most accurate strategists," advises taking a wait-and-see stance, reducing stock and high beta exposures as much as possible, with their latest prediction essentially warning investors that while the long-term trend of AI compute power themes still exist, the extreme concentration of semiconductor trades, extreme leverage positions, low cash buffers, overpriced long-term growth prospects, and risks of cooling capital expenditures, may suppress the summer market and amplify any slight negative triggers leading to valuation retractions.