AI-Related Stocks Fall as Chipmakers Report Weakened Demand

Stock prices for several companies tied to artificial intelligence declined sharply last week, extending into the current week. The downturn began June 22 when Alphabet recorded its worst trading day in more than a year after multiple executives left its DeepMind research unit.

Investors cited the companies' combined $500 billion spending plans and signs of softening demand for high-bandwidth memory products. The two firms account for half the value of South Korea's Kospi index, and trading in their shares was halted.

The declines follow substantial gains earlier in the year.

Samsung shares had risen 183 percent and SK Hynix shares 310 percent since January. The Kospi index itself is up 125 percent for the year, its strongest first-half performance since at least 1990. U.S. chipmaker Micron reported quarterly revenue that quadrupled year-over-year and exceeded analyst expectations. Its stock price has risen 300 percent since January.

SpaceX shares fell by double digits after the company announced plans to raise an additional $20 billion through a bond sale. The company had raised more than $85 billion in its recent initial public offering. The New York Times reported that OpenAI is likely to delay its own planned stock market debut until next year.

Apple attributed recent price increases on its products to higher costs for computer memory chips.