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 Why Did Some AI Stocks Fluctuate While Others Held Firm This Week?

This week's market performance was more indicative of individual stock movements than sector trends.

Even within the same AI, tech stock, or Big Tech categories, stock price trajectories diverged significantly. Some plummeted, some held relatively steady, and others even rebounded.

This divergence was not merely a matter of random supply and demand but a signal of what the market was worried about and what it still held hope for.

The core theme of this week's stock radar was the market's divided selection even within the same thematic groups.

The semiconductor and hardware sectors were the first to feel the pressure.

Stocks directly linked to AI infrastructure, such as Nvidia, Micron, Broadcom, and Intel, faced both interest rate burdens and sector-specific headwinds. As these stocks have strongly benefited from AI optimism, they were also significantly impacted when the market began to reassess valuations.

Notably, rising oil prices this week pushed back interest rate cut expectations, which first impacted stocks heavily reliant on future growth premiums. Among tech stocks, the most overvalued segment faced the initial pressure.

The announcement from TurboQuant further added to the burden for memory-related stocks. While Google's announcement could be interpreted as a long-term factor to reduce AI diffusion costs, the market this week reacted more to the immediate fear of "will memory requirements decrease?"

Consequently, memory-related stocks like Micron experienced direct selling pressure. The market was more sensitive to potential short-term decreases in demand per unit rather than long-term overall increases.

In contrast, stocks with different characteristics within the tech sector, such as Tesla, Apple, and Salesforce, received relatively different evaluations.

Tesla showed a rebound trend driven by individual catalysts like Elon Musk's vision for Terafab for AI chip production. Apple performed relatively well compared to stock groups directly linked to hardware supply chain instability. Salesforce, seen as a prime example of applying AI to actual business and services, was placed on a different evaluation axis than infrastructure builders.

This reveals a partial shift in the market's focus from simple AI hardware expansion to AI utilization and monetization structures.

The weakness in Alphabet and Meta carries another meaning.

These companies faced not only the general interest rate burden affecting all tech stocks but also individual negative news. Meta was burdened by litigation issues and news of recommended punitive damages, while Alphabet, separate from the technical implications of the TurboQuant announcement, became a focal point amplifying market anxiety.

In essence, this week's market perceived even companies announcing technological innovations not as subjects of good news but as variables disrupting the existing order. This is a typical characteristic of a risk-averse market, where the market becomes more sensitive to the magnitude of the impact a development might bring than its direction.

SMCI was the most dramatic example in this week's stock radar. Allegations of technology smuggling to China and indictments of related individuals were perceived not just as individual setbacks but as incidents symbolizing policy risks across the entire AI server and semiconductor supply chain.

The market did not view this solely as an SMCI-specific issue but as a signal of larger risks related to semiconductor security and supply chain control. Therefore, SMCI's sharp decline was both a stock event and an industry event.

In summary, the market's criteria were clear this week.

First, overvalued hardware stocks vulnerable to interest rate burdens were the first to falter.

Second, stocks with distinct individual catalysts or those closer to the AI utilization phase held up relatively well.

Third, stocks linked to policy risks acted as catalysts exacerbating the sentiment across the entire industry.

Ultimately, the same AI began to be differentiated into stocks of 'equipment and expectations' for some, and stocks of 'utilization and monetization' for others.

In this regard, this week's stock radar delivers an important message.

The market no longer lumps all tech stocks together under the single term "AI." Evaluations are now divided based on who is closer to actual profits, who is still merely expensive with a premium, and who is exposed to policy risks. This is why, even with the same AI, some stocks faltered while others held strong this week.

Stock differentiation is likely to continue next week.

If oil prices and interest rates remain volatile, the pressure on hardware and highly valued growth stocks will likely persist.

Conversely, if interest rates stabilize, stocks that saw sharp declines this week may attempt a technical rebound. However, such a rebound is less likely to lead to a uniform AI rally as before; instead, it is more probable to be more finely differentiated based on earnings, policy, and monetization potential.

Ultimately, this week's stock movements can be summarized in one sentence: The market has not abandoned AI, but it has begun to re-evaluate what within AI is more robust.