SOXX Extends Selloff After 8-Day Decline, KOSPI Rebounds: Jim Cramer Calls SK Hynix ‘Epicenter Of Fear’

South Korea’s KOSPI rebounded on Friday, giving investors some respite.

• SOXX slipped further in the overnight session late Thursday.
• “High level of fear would normally be attractive,” but one needs to find buyers for stressed securities, CNBC’s Jim Cramer said.
• South Korea’s Kospi rose over 3% on Friday after a 7.6% plunge in the previous session.

The iShares Semiconductor ETF (SOXX) extended its losing streak on Thursday as fresh concerns about the durability of AI investments and mounting financing risks kept investors on edge, though a rebound in Korean tech stocks eased some anxiety. 

SOXX fell 0.8% overnight, after declining for eight consecutive sessions. Advanced Micro Devices (AMD) and Intel (INTC) slipped less than 1%, while Nvidia (NVDA) bucked the trend, gaining 0.2%. South Korea’s tech-heavy Kospi, meanwhile, rose 3.4% on Friday, with Samsung Electronics up a similar amount. 

The recent weakness reflects growing concerns that the AI infrastructure boom may not deliver returns quickly enough to justify the enormous sums being invested. Higher-than-expected U.S. inflation has also fueled expectations of further interest rate hikes, raising borrowing costs and adding pressure on companies relying on debt to finance their growth.  

Jim Cramer Flags SK Hynix As Epicenter Of Fear

CNBC’s Jim Cramer said elevated fear could normally present an attractive buying opportunity, but investors first need to identify where demand for battered assets could emerge.

“High level of fear would normally be attractive. But you have to find buyers of Coreweave bonds, Oracle common stock and SK Hynix, of course,” Cramer wrote on X.

“The latter is the epicenter of fear because the Kospi is still up more than 50%, so lots of people are underwater,” he added. His comments highlight the pressure on South Korean chipmakers, which had rallied sharply amid booming demand for memory chips.

Chip Rout 

The past two weeks have been some of the most challenging for semiconductor and AI-linked stocks. INTC and AI cloud player CoreWeave (CRWV) have declined over 20%, and SKHY is tracking its worst since its Nasdaq debut in July.

The Kospi plunged 7.6% on Thursday, and steep losses triggered a circuit breaker that temporarily halted trading. 

“There is a growing fear that big names in the tech space are running too fast, and they’re primed to trip up,” Dan Coatsworth, head of markets at AJ Bell, said in a Morningstar report. 

Retail View On Chip Stocks

Retail traders appeared to be in wait-and-watch mode. Retail sentiment for SOXX on Stocktwits remained ‘neutral,’ unchanged over the past week, suggesting neither bulls nor bears had a clear advantage.

“$SOXX Currently the SOXX semiconductors ETF is down -1.49% tonight -- if SOXX closes red tomorrow, it would tie its all-time record from 2006 of 9 consecutive red trading days,” said a trader.

The sentiment was ‘bearish’ for NVDA and AMD, and ‘bullish’ for SKHY and CRWV.

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