Global technology stocks extended their losses on Tuesday as a broad sell-off in artificial intelligence (AI)-related shares wiped billions of dollars from major chipmakers, with investors growing increasingly cautious about the sector’s high valuations.

South Korea’s benchmark Kospi Index suffered one of its sharpest declines of the year, prompting authorities to temporarily suspend trading under the market’s circuit breaker mechanism after the index plunged 8% during morning trading. When trading resumed 20 minutes later, losses deepened, with the Kospi closing down 10.8%.

Technology companies led the market downturn, with Samsung Electronics and memory chip giant SK Hynix each falling more than 13%, reflecting mounting pressure on semiconductor stocks linked to the artificial intelligence boom.

The weakness followed a steep decline on Wall Street, where AI chip leader Nvidia dropped 5% on Monday. The fall pushed Nvidia below Apple in market capitalization, causing the company to lose its position as the world’s most valuable publicly traded company.

AI Sector Faces Growing Investor Pressure

The latest sell-off highlights growing investor concerns that AI-related stocks may have risen too quickly after months of record-breaking gains fueled by strong demand for artificial intelligence technologies.

South Korea’s circuit breaker system, designed to curb panic selling during periods of extreme volatility, has now been activated several times this year as markets experience heightened fluctuations.

Despite Tuesday’s losses, the Kospi had previously more than doubled in value between the beginning of the year and mid-June before entering a sharp correction. The benchmark index has now surrendered nearly one-third of those gains.

SK Hynix Extends Losses

SK Hynix also remained under pressure in the United States. Shares listed on the Nasdaq fell 7.5% on Monday, trading well below the $149 per share offering price set during the company’s record-breaking US market debut on July 9.

Analysts say investors are reassessing the outlook for AI-related companies as concerns grow over stretched valuations, profit-taking, and uncertainty surrounding future earnings growth.

Market participants will closely monitor upcoming corporate earnings and economic data to gauge whether the recent correction marks a temporary pullback or the beginning of a broader slowdown in the AI-driven technology rally.