Shares of SK Hynix (SKHY) fell 4.80% to $136.17 in Tuesday’s premarket session on July 28, extending Monday’s 7.47% decline as investors continued to rotate away from artificial intelligence-related semiconductor stocks ahead of the company’s second-quarter results on Wednesday.

The move marks a sharp reversal for the memory chipmaker. Over the past month, SKHY shares have dropped about 47% from their June peak, erasing roughly $600 billion in market capitalization.

The weakness has spread beyond SK Hynix. Micron Technology (MU) fell more than 4% in Tuesday premarket trading, while Nasdaq futures were down about 0.7% and S&P 500 futures also edged lower, pointing to broader technology sector weakness.

In South Korea, Samsung (SSNLF) slid more than 13% as the AI stock correction in U.S. markets carried into Asian trading. SK Hynix also fell more than 14% on the Korean stock exchange before Tuesday’s U.S. premarket session.

Market Pressure Points

Two main concerns are driving the selloff. First, investors are questioning whether major cloud computing companies will keep spending aggressively on artificial intelligence infrastructure. Second, the launch of Chinese memory maker CXMT on the Shanghai exchange has raised concerns that additional memory chip capacity could pressure industry pricing.

Reports of progress in China’s deep-ultraviolet lithography technology have added to the unease, increasing the possibility that domestic Chinese semiconductor manufacturing could scale faster than expected.

Andy Wong of Pictet Asset Management said the market is reassessing whether memory chipmakers such as SK Hynix are capturing too much of the economics in the AI supply chain. Wong added that investors are now looking more closely at whether views on SK Hynix’s margin extraction from customers will change.

Kim Minji of Must Asset Management said quarterly earnings alone may not provide the catalyst investors are looking for. Minji noted that market participants will be watching whether SK Hynix boosts shareholder value through stock buybacks and whether hyperscale cloud providers continue elevated capital spending.

Wednesday’s Earnings Outlook

Analysts expect a strong second quarter. Consensus estimates call for revenue of ₩84.17 trillion ($57.7 billion), which would represent year-over-year growth of 278.6%. Operating profit is projected at ₩64.24 trillion, nearly seven times the level a year earlier.

The expected growth is tied to continued demand for high-bandwidth memory (HBM) chips used in artificial intelligence infrastructure, along with stronger pricing for DRAM and NAND flash memory. That makes Wednesday’s report a key check on whether recent share-price volatility is about the company’s near-term results or a broader reset in how investors value AI-linked chip suppliers.

Simon Coles, an analyst at Barclays, initiated coverage on SKHY this month with a Buy rating and a $330 price target. That target implies about 130% upside from current levels. Coles said he expects demand to outstrip supply through 2027, which he believes should support memory chip pricing.

Shawn Oh of NH Investment & Securities called SKHY attractive at current valuations, citing deleveraging among Korean retail investors as a technical factor. Oh said some investors are reducing exposure ahead of the broader U.S. technology earnings season rather than reacting to SK Hynix-specific fundamentals.

Wall Street’s consensus rating remains Moderate Buy, and the average analyst price target is also $330.

SK Hynix listed its American Depositary Receipts on the Nasdaq on July 10, raising $26.5 billion in proceeds. Even after the recent decline, the company’s shares in South Korea are still about 130% higher over a longer period.