US and South Korean chip stocks pull back as capital flows to hyperscale cloud service providers

As of the close on Wednesday, US and South Korean chip stocks had fallen more than 20% from recent highs. Samsung reported profit growth and strong guidance, but investors are concerned about excessive AI infrastructure spending. US President Trump suspended the US-Iran memorandum, causing an increase in geopolitical risk. Morgan Stanley CIO Mike Wilson predicts a correction in chip stocks, with capital flowing from chip stocks to lower-valued hyperscale cloud service providers.