AI Infrastructure Stocks Face Major Selloff as Volatility Hits Market
Chicago, IL – July 31, 2026 – A significant selloff in AI-related stocks has occurred, largely triggered by the release of the Kimi K3 model by China-based Moonshot AI on July 16. This new model has raised concerns over its efficiency and potential impact on demand for U.S.-based AI infrastructure, including key players such as Micron Technology (MU) and SanDisk (SNDK). The magnitude of the market reaction has equated to the worst momentum stock destruction seen since the COVID-19 crash, fostering significant losses across the sector.
The turmoil has left over 1 million South Korean retail investors facing margin calls as leverage exacerbated the situation. Notably, the hedge fund Situational Awareness reported a 90% drawdown in July, contributing to the accelerated selloff in AI stocks. Industry metrics indicate that many AI infrastructure companies have declined by over 50% in recent months, providing potential buying opportunities as fundamentals remain strong amid forced sell-offs.
5 Stocks Our Experts Predict Could Double In the Next Year
By submitting your email, you'll also get a free pivot & flow membership. A free daily market overview. You can unsubscribe at any time.
