SpaceX (SPCX) shares are giving up most of the gains the stock has accumulated since early October as an AI-related trade collapsed this week.
THE South Korean stock market collapses Tuesday, with memory chip makers Samsung (005930.KS) and SK Hynix (SKHY) bearing the brunt, down 7.4% and 10.1%, respectively.
The sale comes after Chinese technology company CXMT (688825.SS) highlighted key progress on a new memory cell architecture at an event in Shanghai this weekend, and the company plans to launch new memory products based on the design by the end of the year. The new, cheaper memory can be used in data centers that are critical to the AI-related memory business.
156.54 -6.88 (-4.21%)
Closing: October 13 at 4:00:00 p.m. EDT
158.28 +1.74 (+1.11%)
Memory and chip stocks like Micron (MU) and SanDisk (SNDK) – which have surged this year on relentless orders for memory chips – have also fallen. SpaceX, which relies on AI trading and data center construction and also presents itself as an up-and-coming chipmaker, felt sympathy.
SpaceX shares fell 4% on Tuesday.
CEO Elon Musk gave his thoughts on the progress of CXMT.
“When China succeeds in manufacturing a product, its ability to scale is often greater than the rest of the world combined. We’ve seen this with lithium batteries and solar power, for example,” Musk said in an article on X.comwith a caveat.
“Maybe RAM will be different, but RAM was a low-margin product only about 3 years ago,” he added, meaning gains from CXMT technology could be reduced.
Still, while a lower price of entry for expensive data centers would be a good thing, for chipmakers and those looking to profit from selling data center compute, it could mean lower prices, hence SpaceX’s drop today.
Meanwhile, Wall Street is increasingly focused on trading AI and technology. Bank of America’s latest fund survey finds the proportion of fund managers overweight in technology rose from 30% last month to 37%, the highest since August 2020, while 45% of respondents agree there will be an AI bubble in 2027.
Pras Subramanian is a senior transportation reporter for Yahoo Finance. You can follow it X and on Instagram.
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