SpaceX stock slammed as AI memory trade crumbles in South Korea
SpaceX shares are giving most of the gains the stock had accumulated since early April, as an AI-related trade unravelled since the start of the week.
SpaceX ( SPCX ) shares are giving up most of the gains the stock has accumulated since early October while an AI-related trade has been unraveling this week.
The South Korean stock market tumbled on Tuesday, with memory chipmakers Samsung ( 005930.KS ) and SK Hynix ( SKHY ) bearing the brunt, down 7.4% and 10.1%, respectively.
The sell-off comes after Chinese tech firm CXMT ( 688825.SS ) highlighted key progress on a new memory cell architecture during an event in Shanghai over the weekend, and the company plans to launch new memory products based on the design by year-end. The new cheaper memory can be used in data centers that are key to the AI-related memory trade.
Memory and chip stocks like Micron ( MU ) and SanDisk ( SNDK ) — which have surged this year due to unrelenting memory chip orders — slipped as well. SpaceX, which is levered to the AI trade and build-out of data centers and also fashions itself as an up-and-coming chipmaker, fell in sympathy.
CEO Elon Musk weighed in on the CXMT's progress.
"When China figures out how to manufacture a product, their ability to scale is often greater than the rest of the world combined. We saw this with lithium batteries and solar, for example," Musk said in a post on X.com , with a caveat.
"Maybe RAM will be different, but RAM was a low-margin commodity only ~3 years ago," he added, meaning the gains from CXMT tech may be curtailed.
Nevertheless, while a cheaper input price for cost-heavy data centers would be a good thing, for the chipmakers and those looking to benefit from selling data center compute, it may mean lower prices, hence SpaceX's drop today.
Meanwhile, Wall Street is ever more levered to the AI and tech trade. Bank of America's latest fund survey finds that the proportion of fund managers who are overweight tech has risen to 37% from 30% last month, the highest since August 2020, while 45% of respondents agree there will be an AI bubble in 2027.
Pras Subramanian is Lead Transportation Reporter for Yahoo Finance. You can follow him on X and on Instagram .
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