New York, July 13, 2026 (EDT) — Artificial intelligence-related equities closed lower on Monday, with a notable divergence across subsectors. A basket of three memory and storage companies declined by an average of 7.2%, while a group of four compute and foundry firms fell a comparatively modest 3.7%. This performance gap suggests investors are reducing their time horizons for profit expectations tied to supply constraints, even as order backlogs remain robust and capital expenditure on AI infrastructure continues.
High-bandwidth memory (HBM) emerged as the primary pressure point. SK Hynix, which captured 58% of HBM revenue in the first quarter, saw its Seoul-listed shares plunge 15.4%. Despite this drop, its U.S. American Depositary Receipts still traded at a 25.6% premium over the Korean shares. Micron Technology and Samsung Electronics each held a 21% share of the HBM market. Morningstar analyst Jing Jie Yu noted that “fresh capacity coming online in 2027 and 2028 will improve supply dynamics, leading to price erosion.”
Meanwhile, fresh demand data countered fears of an AI order slowdown. Taiwan Semiconductor Manufacturing Company reported June revenue up 67.9% year-over-year to NT$442.68 billion, and second-quarter sales surged 36% to a record NT$1.27 trillion. Meta Platforms expanded its Louisiana Hyperion data-center project to 5 gigawatts from 2 gigawatts, lifting projected capital expenditure above $50 billion. Despite these bullish signals, Meta shares slipped 1.9% on the day.
The divergence underscores a shift in investor focus from near-term scarcity to longer-term sustainability. Foundries like TSMC benefit from diversified revenue streams across multiple chip buyers, while memory makers’ profits are more sensitive to tight supply and rising prices. Monday’s sell-off targeted companies that rely on continued scarcity to sustain earnings growth through 2027 and 2028.
Positioning data highlighted the reversal. Funds tracking U.S. semiconductor stocks experienced approximately $11 billion in outflows for the week ended June 24, the largest weekly outflow this century, following two weeks of roughly $12 billion in inflows. Short interest in the sector reached a three-year high. The Philadelphia semiconductor index remains up 83% year-to-date, despite an 11% decline from its June peak. “We’ve never seen this kind of extreme earnings growth, but the question is how long it can continue,” said Steve Sosnick, strategist at Interactive Brokers.
Broader market pressures also weighed on AI stocks. Crude oil prices rose 9.4%, and markets priced in at least one more quarter-point U.S. interest rate hike by year-end. Oracle dropped 6.3%, and Intel fell 6.1%. Ross Mayfield, strategist at Baird, questioned “the deluge of corporate issuance to fund AI capital expenditure.”
The scarcity trade could rebound quickly if supply remains tight. SK Hynix CEO Kwak Noh-jung warned, “We forecast that next year will be the worst year in the industry’s history from the supply perspective.” However, the risk is that new fabrication plants begin production in 2027 and 2028 just as higher power and borrowing costs slow customer deployments, pushing memory prices down before additional sales can compensate.
Looking ahead, U.S. consumer price index data is due Tuesday at 8:30 a.m. EDT, followed by Federal Reserve Chair Kevin Warsh’s testimony before the Senate Banking Committee on Wednesday. TSMC will release full second-quarter results on Thursday. If inflation runs hot or TSMC signals caution, Monday’s repricing could gain momentum. Conversely, strong margins and an improved demand outlook would suggest investors got ahead of the news.
