Wedbush analyst Dan Ives believes the artificial intelligence trade remains in the “third inning,” calling Tuesday’s pullback in technology and memory-chip stocks a “gut check moment” rather than a sign of weakening demand.
AI Demand Remains Strong
Speaking on CNBC’s Closing Bell Tuesday, Ives said checks in Taiwan and South Korea continue to point to strong demand across the AI supply chain.
The comments came after a selloff in AI, semiconductor and memory-chip stocks, led by weakness in South Korean memory names ahead of Micron Technology Inc‘s (NASDAQ:MU) earnings report after the bell on Wednesday.
“We continue to believe this AI Revolution is in the 3rd inning and today’s tech sell off was a ‘gut check moment’ after the Korea-led memory chip sell off overnight,” Ives said in a post on X.
According to Ives, the demand continues to significantly outpace supply across the AI ecosystem, adding that the recent selloff is “not an indicator of anything from a memory chip perspective or demand softening.”
Memory Pullback Seen As Healthy
Ives said the sharp decline in memory-chip stocks should be viewed as a healthy pullback following a strong run rather than a sign of deteriorating fundamentals.
The analyst highlighted SK Hynix and Micron as key beneficiaries of continued AI spending, adding that the demand trends remain intact despite recent volatility.
“The pullback in the KOSPI… It’s a healthy pullback,” Ives added, after South Korea’s tech-heavy benchmark, the world’s best-performing index this year, fell 10% on Tuesday.
According to Ives, the recent weakness represents a buying opportunity across memory, infrastructure and other AI-linked names.
Korean Chip Stocks Rebound
Samsung Electronics and SK Hynix each fell more than 12% on Tuesday, while Taiwan Semiconductor Manufacturing Co (NYSE:TSM) also declined roughly 6% as investors sold AI and memory-related stocks across Asia.
The selloff extended to U.S.-listed South Korea funds, sending the iShares MSCI South Korea ETF (NYSE:EWY) down 12.25% and the Direxion Daily MSCI South Korea Bull 3X Shares (NYSE:KORU) lower by 35.70%.
The pressure eased on Wednesday, with the KOSPI rising 3.20% as Samsung climbed nearly 9% and SK Hynix advanced 2% in Seoul at the time of writing.
Price Action: Shares of Micron Technology closed 13.18% lower on Tuesday at $1051.77, and fell further 12.08% in after-hours trading.
Benzinga edge rankings indicate MU has a Momentum score in the 99th percentile and a Growth score in the 83rd percentile.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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