Samsung Posts Strong Earnings but Stock Plummets; Tech Stocks Crash as AI Bubble Fears Mount

U.S. stock markets declined broadly on the morning of the 7th, with technology stocks facing the heaviest selling pressure, dragging major indices lower. The previous day’s market leaders—artificial intelligence (AI) and semiconductor stocks—turned negative, reigniting investor concerns about whether the AI investment boom has overheated and if massive capital expenditures will truly translate into corporate profits.

As of 10:09 a.m. Eastern Time on the 7th, the Dow Jones Industrial Average fell 22.26 points, or 0.04%, closing at 53,033.65; the S&P 500 dropped 27.16 points, or 0.36%, to 7,510.27; and the tech-heavy Nasdaq Composite Index plunged 268.26 points, or 1.03%, to 25,852.90—the weakest performer among the three major indices.

Broadcom had already given up most of its gains in pre-market trading. The Russell 2000 Index, representing U.S. small-cap companies, also declined by 18.35 points, or 0.61%, closing at 2,991.19, indicating that selling pressure is no longer confined to large-cap tech stocks but spreading across more industries and market-cap segments.

Market focus centered on semiconductor and AI-related stocks. Chip and memory stocks that drove the U.S. market higher on the 6th faced broad profit-taking the next day, showing weakness in pre-market trading and extending losses after the opening bell.

Broadcom, a major U.S. chip designer, had surged 3.7% the previous day, becoming a key driver of market gains. However, in pre-market trading, it gave up most of those gains, with its share price falling about 2.8%. Micron, Marvell Technology, and Intel all declined between 4% and 6% after the market opened, signaling a clear cooling in investor appetite for AI supply chain stocks.

Western Digital, a major data storage equipment manufacturer, has seen its stock price triple this year due to strong demand from AI servers and data centers. Yet, it still fell about 7% in pre-market trading, reflecting clear correction pressure on high-valuation tech stocks.

In Asia, Samsung Electronics announced strong earnings, with its latest quarterly operating profit soaring 19-fold and revenue more than doubling year-on-year—far exceeding market expectations. However, the strong results failed to win investor support; instead, the stock plunged 7.7%, becoming a key indicator of global tech stock volatility and deepening concerns about whether AI sector valuations have become too high.

Stephen Innes, market analyst at SPI Asset Management, pointed out that the real stress test for the AI industry may not come from weak demand, corporate cuts in capital spending, or slowing data center construction—but from cases like Samsung, where companies deliver exceptional results yet still face heavy market sell-offs. He believes this signals that the market is beginning to re-evaluate whether the AI investment frenzy has already fully priced in future growth prospects.

Over the past year, AI-related stocks have continuously pushed global markets to new highs, with massive capital flowing into AI chips, high-speed memory, cloud computing, and large-scale data center construction. However, markets are increasingly concerned whether such massive investments will yield corresponding productivity gains and corporate profit growth. If returns cannot be proven, high valuations may face further corrections.

European markets showed mixed performance. Germany’s DAX index fell 0.6% at midday; France’s CAC 40 rose 0.3%; and the UK’s FTSE 100 also edged up 0.3%, suggesting European markets are relatively insulated from tech stock volatility.

Asian major markets generally weakened. South Korea’s Kospi index closed down 4.9% at 7,656.31, with intraday losses briefly widening to 8%, making it one of the hardest-hit regional markets.

Japan’s market also came under pressure, with the Nikkei 225 falling 2.1% to 68,256.96. Tokyo Electron, a leading semiconductor equipment maker, dropped 3.9%; Kioxia Holdings, a memory manufacturer, plunged 11.3%, reflecting broad sell-offs across the chip supply chain.

Hong Kong’s Hang Seng Index fell 0.5% to 23,496.98; China’s Shanghai Composite Index dropped 1.3% to 3,990.24; and Taiwan’s Weighted Index fell 2.3%, retreating in tandem with Asian tech stocks.

Other Asia-Pacific markets: Australia’s S&P/ASX 200 fell 0.3% to 8,803.90; India’s Sensex Index dipped 0.1%.

In energy markets, international oil prices remained volatile. Brent crude futures, a global oil price benchmark, rose 69 cents to $72.68 per barrel, roughly returning to pre-late February levels when the U.S. and Israel launched military actions against Iran.

U.S. West Texas Intermediate (WTI) crude also rose 56 cents to $69.11 per barrel.

However, Middle East tensions continue to affect market sentiment. The UK military reported that an oil tanker traveling off Oman near the Strait of Hormuz was hit by a flying object and caught fire in the early hours of the 6th local time—an apparent new attack on shipping in the Persian Gulf.

The Strait of Hormuz has long been considered one of the world’s most critical energy transport corridors. In peacetime, about one-fifth of global oil and natural gas trade passes through this narrow waterway, so any military conflict or shipping disruption could impact global energy supply and international oil prices.

Iran’s state-run TV reported the attacked vessel was a liquefied natural gas (LNG) carrier, claiming it was targeted for ignoring warnings, but did not directly admit responsibility for the attack.