South Korea’s KOSPI enters bear market, dragging global chip stocks down

Nvidia ↘ 0.98% has seen its market capitalization fall by approximately $1 trillion from its June peak, as a confluence of factors — a liquidity crisis in South Korea, reports of a delay to a key product, and broader semiconductor sector pressure — has dragged shares below $200 and pushed its forward valuation to levels not seen since before the AI boom began.

A Perfect Storm of Selling Pressure

The selloff accelerated in early July after South Korea's Kospi, the world's best-performing major index in 2026 with gains of 74% year-to-date, entered bear market territory. The index plunged more than 20% from its June 22 record close of 9,114.55, falling to 7,246.79 on Wednesday, according to Reuters. The crash — driven by concentrated positions in Samsung Electronics and SK Hynix, which account for 60% of the index — triggered forced margin calls that rippled through global chip stocks.reuters+2

The Wall Street Journal reported that margin calls were forcing selling by investors, amplifying volatility "both on the uptrend and in drawdowns". The Philadelphia Semiconductor Index PHLX Semiconductor Index ↘ 0.52% lost nearly 5% as Intel ↘ 2.24%, Micron ↘ 0.77%, and AMD Advanced Micro Devices, Inc. ↗ 0.81% fell as much as 10%.wsj+1

Kyber Delay Adds to Uncertainty

Compounding the pressure, research firm SemiAnalysis reported that Nvidia's Kyber NVL144 rack-scale architecture — showcased by CEO Jensen Huang at GTC just months ago — faces a delay of more than 12 months, pushing its release to 2028 due to manufacturing bottlenecks in a specialized 78-layer circuit board, according to CNBC. Nvidia denied the report, stating "Our roadmap is intact".cnbc+1

Nvidia shares closed at $196.93 on Tuesday, down roughly 18% from their June highs near $240 and trading well below the $200 level lost on June 23. The company's market cap stood near $4.73 trillion as of July 7, down from approximately $5.7 trillion at its peak.companiesmarketcap+3

Wall Street Remains Bullish on Valuation

Goldman Sachs The Goldman Sachs Group, Inc. ↗ 3.73% reaffirmed its Buy rating on July 6, with analyst James Schneider maintaining a $285 price target and calling the valuation "quite compelling" as Nvidia's forward price-to-earnings ratio has retreated to a level well below its multi-year average. The analyst consensus remains a Strong Buy, with 36 of 37 analysts rating it a Buy and an average 12-month price target of $309.33.tipranks+1

The question facing investors is whether the selloff reflects a fundamental reassessment of AI spending or merely forced liquidation from an overleveraged corner of the market. As one Yahoo Finance analysis put it, the setup is "binary" — strong AI spending guidance from cloud companies in late July could push Nvidia back above $200, while fading confidence could crack $190.beincrypto