AI Semiconductor Stocks Plunge Amid War and Rotation

This week, the market took a significant hit due to Iran and semiconductors. The expectation of a ceasefire collapsed as the U.S. expanded its airstrikes on Iran and Iran threatened energy transport routes. International oil prices surged amid concerns over disruptions in Middle Eastern oil transport. A geopolitical shock occurred just as AI semiconductor stocks were cooling off from overheating. The Philadelphia Semiconductor Index fell over 20% from its June peak, entering a bear market, with major AI-related stocks like NVIDIA and Micron also experiencing substantial declines. Semiconductor stocks in South Korea, Taiwan, and Japan were similarly affected. Currently, funds in AI hardware are shifting towards relatively less inflated sectors such as finance, energy, and healthcare. Investors must determine whether this marks the end of the AI industry or if it is merely a temporary correction in AI stocks. One of the causes of this semiconductor plunge is the new open-source model GLM-5.2 released by China's Z.ai, which can handle long contexts of up to 1 million tokens and is designed to reduce the computational costs required for AI operation.