Understanding the Market | Storage concept stocks lead the decline, Kioxia's stock price plummets, market value shrinks by half from its peak, and the global technology sector faces another comprehensive sell-off
The global technology sector has experienced a comprehensive sell-off, with storage concept stocks leading the decline. Kioxia's stock price plummeted, with its market value shrinking by half from its peak; stocks such as GIGADEVICE and Montage Technology also saw significant declines. The market is concerned about the excessive rise in the AI industry and spending issues, leading investors to take profits. Despite TSMC's impressive Q2 performance, it failed to boost U.S. stocks and instead intensified the pressure to close crowded positions in AI trades
According to Zhitong Finance APP, storage concept stocks have seen significant declines. As of the time of publication, GIGADEVICE (03986) has dropped 10.25%, trading at HKD 538.5; Montage Technology (06809) has fallen 7.47%, trading at HKD 257.8. Storage-related ETFs have also seen expanded declines, with the Southern 2x Long SK Hynix (07709) down 17.32%, trading at HKD 46.38; and the Southern 2x Long Samsung Electronics (07747) down 25.4%, trading at HKD 61.92.
In terms of news, on Friday morning in Tokyo, Kioxia's stock price plummeted by 14%, down 51% from last month's peak, with a market value evaporating by at least 29.5 trillion yen (USD 181.7 billion). Since becoming Japan's most valuable company, the market value of storage chip manufacturer Kioxia has halved in a month, as investors grow increasingly concerned that the AI-driven industry rally has peaked. A strategist from Daiwa Securities stated that the chip industry has clear cyclicality, and similar trends have occurred multiple times in the past. The market is finding it difficult to continue betting on further acceleration in profit growth, and investors chasing short-term gains may have already taken profits at this stage.
Meanwhile, TSMC reported impressive Q2 results, but U.S. stocks fell overnight. Ortus Advisors strategist Andrew Jackson noted that U.S. tech stocks and the AI sector faced a broad sell-off again, as TSMC's earnings report was not seen by the market as sufficient to support further gains in the sector, raising concerns about excessive spending in the AI field. However, Andrew Jackson believes that this round of selling reflects the concentrated unwinding of crowded positions in popular AI trades, rather than a deterioration in the industry's long-term fundamentals
