AI, memory, neoclouds, and quantum stocks have all been crushed at the same time: over $1T in combined AI-stock value vanished in two weeks, the Kospi dropped more than 15% in a few days and over 30% in a month, and several names fell 30% to 55% even while revenue and contract wins kept compounding. The core fear is China mass-producing DUV lithography machines later this year, but the immediate setup is more nuanced: memory demand and pricing are still strong, while SK Hynix, MU, and SanDisk are trapped by long contract structures that both cap upside and cushion downside. META’s cloud push is a different case from the neo clouds because META is already a giant buyer of compute, not a capital-starved seller, and the market is also lumping quantum stocks into the selloff despite their weak link to Korean memory. The setup is presented as too early to fully price in China memory risk, with earnings in early August and continued volatility likely across memory, AI cloud, and quantum names.
AI stocks lost over $1T in combined value over the last two weeks; some names fell fast enough to hit circuit breakers and halt trading.
The Kospi is down over 15% in the last few days and more than 30% in the last month; it has triggered a market-wide circuit breaker at least 8 times this year.
The Kospi tracks 833 companies, with Samsung at over 26% and SK Hynix at another 24%, so more than half the index sits in just two stocks.
China has begun mass-producing its own emerging DUV lithography machines, with first systems due later this year; ASML remains the only company that can make these machines and has controlled almost the entire global lithography market until now.
DUV lithography is not precise enough for the most advanced GPUs or AI processors at high yields, but it is precise enough for memory, NAND flash, DRAM, and HBM dies; stacking those dies remains a separate hard problem.
If China can mass-produce memory, Samsung and SK Hynix are exposed because they control around 70% of global DRAM and close to 80% of HBM.
China still has to recreate the full memory production process and reach competitive yields, so the market is described as too early in pricing the China-memory threat into these stocks.
On July 13, SK Hynix fell more than 15% in a single session, its worst day in 40 years; its HBM is mostly locked into long-term contracts running roughly 3 to 5 years and fixed 12 to 36 months before chips ship.
Standard DRAM prices rose about 30% quarter over quarter and NAND flash about 50% quarter over quarter, but SK Hynix could not reprice already-contracted memory higher.
SanDisk disclosed about $42B in minimum contract value signed over the last quarter, covering more than a third of the memory by bits it expects to make this fiscal year.
MU has 16 strategic customer agreements worth over $100B in minimum contract value, covering roughly 20% of DRAM and a third of NAND flash volume.
SK Hynix is down around 25% over the last couple weeks on the Nasdaq and around 50% in the past month on the Korea Exchange; MU is down around 35% over the last month and 25% in the last week; SanDisk has been cut in half over 30 days.
Bloomberg reported earlier this month that META is planning Meta Compute to rent out extra AI infrastructure; that report sent META up almost 9% in one day and knocked CRWV, NBIS, and IREN down 14% to 17%.
Neo clouds buy power, build or acquire data centers, fill them with GPUs and networking gear, and rent the capacity out; young unprofitable names must borrow at high rates or dilute shareholders, while META can fund the build without that capital strain.
META reported on July 29 that it is using all of its servers itself; on that call, Mark Zuckerberg said selling compute for short-term profit is foolish versus selling finished intelligence services like agentic models and coding tools.
On July 14, Nebius agreed to sell more than $1B of compute to Reflection AI under a contract running through 2029 that includes Nvidia’s GB200 Blackwell Ultra chips; on July 20, IREN signed $2.8B of new multi-year AI cloud contracts and raised its year-end revenue-run-rate target.
On July 20, NVIDIA filed an SEC disclosure saying it owns over 22M shares of Nebius, equal to around 9.3% of the company; META also has $35B committed to CoreWeave and up to $27B in additional contracts with Nebius, making META a net buyer of neocloud compute.
IonQ, D-Wave, and Rigetti are down 30% to 40% over the last few weeks and each fell close to 10% on July 13, but their businesses keep hitting milestones: AT&T expanded D-Wave use on July 27, Rigetti expanded its HPE collaboration on July 27 with construction starting September 1, and IonQ cleared the final regulatory hurdle to buy Skywater Technology one day later.
The comparison table shows every stock down 30% to 55% in a single month while almost every name posted triple-digit revenue growth; Nebius grew revenue 453%, IonQ 335%, and Rigetti’s revenue was down 34% year over year even though its most recent quarter rose 199% on system sales and government contracts.
The setup favors dollar-cost averaging with cash kept aside for lower prices: green days in the drawdown have repeatedly turned into short-lived bounces before another leg down.