The AI-related stock market experienced a sharp sell-off in a single trading session. Shares of chip and memory manufacturers lost 10–13%, while the specialized Roundhill T-REX (RAM) fund plunged 18%. Investors who entered at recent highs found themselves deep in the red.

Notably, the broader market suffered far less. The US Tech 100 index, which comprises the 100 largest US technology companies, declined 1% to 28,152.7 points. The broad US 500 lost 0.18% to 7,675.3 points, and the Invesco QQQ fund slipped just 0.04%. This points to the targeted nature of the sell-off: the pressure was concentrated specifically on stocks tied to AI infrastructure.

Who was hit hardest

Memory manufacturers — makers of chips essential for the servers that run AI models — sustained the biggest losses. Micron shares fell 10.4%, Sandisk dropped 11.32%, and the Roundhill Memory (DRAM) fund, which bundles memory manufacturers' stocks, declined 9.3%.

Other chipmakers also lost value. The iShares Semiconductor (SOXX) fund fell 4.31%. For individual stocks, the picture is as follows:

  • Marvell Technology — down 10.33%;
  • Credo Technology — down 12.84%;
  • Lumentum — down 11.68%;
  • Applied Optoelectronics — down 9.61%;
  • Intel — down 5.91%;
  • NVIDIA — down 4.17%;
  • Broadcom — down 3.47%;
  • Coherent — down 3.14%;
  • AMD — down 1.5%.

Companies servicing the AI industry also declined. Nebius Group, which builds data centers for AI, lost 10.95%. IREN, formerly engaged in Bitcoin mining and now pivoted to AI computing, fell 13.45%. Bloom Energy, which produces fuel cells to power data centers, dropped 10.52%. Simply put, the sell-off affected everything that was profiting from the AI hype.

What this means for investors

Such a sharp decline signals that the market has begun to doubt further growth in AI companies. In recent months, these stocks rose faster than others, and many investors bought them at already elevated prices. Now those investments are underwater. If your portfolio holds chipmaker stocks or funds like SOXX and DRAM, you could have lost between 4% and 18% of their value in a single session.

The reaction of market participants is telling: Kevin Xu, head of the startup Alpha AI, publicly acknowledged that betting on AI no longer works. According to him, he and many others bought at the peak and are now holding losing positions. He noted that he hasn't seen profit in a long time and checks quotes every minute, regretting that he didn't stay in cash. Xu also stated that hedge funds are fighting among themselves, while retail investors are caught in the crossfire.

Cryptalist analysis: The current correction reflects not a collapse of the AI sector as such, but a reassessment of risks after a prolonged rally during which chipmakers' market capitalization grew faster than fundamental indicators. The targeted nature of the sell-off amid a stable broad market points to capital rotation rather than systemic risk. For institutional investors, this is more of a window for selective entry into quality assets than a signal to flee the sector.