Causes of Nvidia's Stock Plunge and Nasdaq 26,000 Collapse: Key Summary of AI Semiconductor Peak Fears

Key Summary: The Nasdaq 26,000 index has collapsed amid a massive sell-off of major tech stocks, including Nvidia. Market skepticism is growing over the low practical profitability compared to the massive capital expenditures (Capex) of big tech companies, sparking fears of an AI semiconductor demand peak (peak-out) that is putting downward pressure on global stock markets.

Spread of AI Semiconductor Peak Fears and Background of the Stock Market Crash

The artificial intelligence (AI) rally that has recently driven the US stock market has hit a major roadblock. The biggest cause of this sharp decline in the Nasdaq index is doubt over profitability relative to investment. Hyperscalers (operators of ultra-large data centers) are pouring astronomical amounts of money into building AI infrastructure, but criticism has arisen that the actual service revenue generated from this does not yet justify the scale of the investments.

Added to this are concerns over a global economic recession. As key economic indicators show signs of slowing, expectations for early interest rate cuts by the Federal Reserve (Fed) have increased. However, the market has interpreted this as a sign of economic downturn, strengthening the avoidance of risky assets. As a result, funds concentrated in large tech stocks like Nvidia and Apple have fled en masse, maximizing volatility. The domestic stock market has also been hit hard, with foreign selling accelerating, triggering consecutive Kospi sell-side sidecars and leading to a simultaneous plunge in related stocks like Samsung Electronics and SK Hynix.

Future Outlook on AI Semiconductor Stocks FAQ

• Q. Is the drop in Nvidia's stock price a long-term trend reversal?
  A. Experts' opinions are currently divided. Some analyze it as a healthy short-term correction relieving excessive valuation burdens, while others point out that it is a structural peak indicating a real slowdown in growth. The upcoming earnings announcements from big tech companies, where actual AI-related profits will be confirmed, will be a crucial watershed determining the market's direction.
• Q. How should investors respond to domestic semiconductor stocks (Samsung Electronics, SK Hynix)?
  A. Domestic semiconductor companies are deeply involved in the global AI value chain, so high stock price volatility is expected for the time being. However, the supply shortage of next-generation core components like HBM (High Bandwidth Memory) is unlikely to be resolved in the short term, so it is advisable to focus on medium-to-long-term earnings improvements rather than short-term issues.
• Q. What is the expected market support level after the Nasdaq 26,000 collapse?
  A. With major technical support levels broken, the search for the bottom is expected to continue for a while. Whether the visibility of Fed interest rate cuts and the stabilization of macroeconomic indicators materialize will serve as the key variable defending the stock market's downside.