Catenaa, Wednesday, November 05, 2025- The global selloff in semiconductor stocks accelerated to wipe off $500 billion on concern over lofty valuations for some AI boom winners.
Memory makers Samsung Electronics and SK Hynix dragged South Korea’s benchmark Kospi down as much as 6.2% Wednesday before it pared much of the loss.
Japan’s Advantest Corp. dropped as much as 10% while Asia’s largest stock, Taiwan Semiconductor Manufacturing, fell more than 3%. All are suppliers to Nvidia.
The moves trimmed roughly $500 billion in combined market capitalization from the Philadelphia Semiconductor Index on Tuesday and a Bloomberg gauge tracking Asia chip stocks on Wednesday.
The selloff underscores how stretched the AI-fueled rally in semiconductor stocks has become after hitting record highs.
Chipmakers have added trillions of dollars in market value since a low in April as investors bet on soaring demand for AI computing power.
The pullback signals the growing unease over the sector’s earnings potential and sky-high stock valuations, particularly if interest rates stay higher for longer.
Wall Street chiefs’ warning of an overdue correction has weighed on the sector this week, alongside reduced expectations for Federal Reserve rate cuts and the prolonged US government shutdown.
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Palantir helped trigger the meltdown on Wall Street with a forecast that failed to impress investors. A similar reaction to Advanced Micro Devices Inc.’s post-market results and outlook amplified the impact on Asia’s trading session Wednesday.
For now, institutional and individual traders alike must grapple with day-to-day volatility. Goldman Sachs Group Retail Favorites Index slid 3.6% Tuesday, roughly triple the loss in the S&P 500 Index.
