Samsung Crash Drags Chip Sector Down: Nvidia Results on Wednesday Decisive

Samsung Electronics fell 8.7% in South Korea on August 24, 2026, despite announcing an unprecedented shareholder return of 90–100 trillion won (approximately 60–67 billion euros). Investors missed an aggressive immediate share buyback and a clear timeline for the cancellation of treasury shares. The reaction was classified as a classic "sell the news" move: foreign sellers stepped in while South Korean retail investors bought the dip.

Semiconductor Sector Under Massive Selling Pressure

The crash at Samsung is no isolated case. Already on August 19, 2026, Samsung shares plunged 5.77%, while competitor SK Hynix lost over 8%. The selling swept the entire sector: rising yields in the bond market and rising crude oil prices contributed to the tech selloff.

The broad chip sector lost over 1 trillion dollars in market capitalization at the end of July. Nvidia led the selloff with a decline of 238 billion dollars (as of July 29, 2026). SK Hynix lost 176 billion dollars, Micron 113 billion dollars. Samsung Electronics lost 173 billion dollars on July 29.

The losses spread across all segments: on July 28, 2026, AMD fell 8%, Intel about 6%, Micron and Seagate over 8%, Western Digital about 7%, and SanDisk 14%. The iShares Semiconductor ETF (SOXX) dropped about 5% on July 7.

Technical Indicators Signal Weakness

The Direxion Daily Semiconductor Bull 3X ETF (SOXL)—a leveraged exchange-traded fund that amplifies semiconductor sector performance threefold—showed technical weakness on August 24, 2026. The ETF rallied to the lower boundary of resistance zone 2, but could not hold it and fell back to the upper boundary of support zone 3. The Relative Strength Index (RSI), a technical indicator for overbought or oversold levels, is approaching the oversold range. This could enable a rebound, but requires stabilization.

Why Strong Business Results No Longer Suffice

The selling wave in the semiconductor sector follows a pattern that observers call the "Samsung effect" or "Nvidia effect": even excellent business results no longer meet the extremely high expectations of the AI market. On July 7, 2026, Samsung shares fell 11%, although the company reported quarterly earnings that exceeded Apple and Nvidia. The quarter was expected to show a 1,800% earnings jump—yet the market reacted with massive selloffs.

Investors are increasingly concerned that spending on artificial intelligence cannot keep pace with skyrocketing memory chip prices. Apple and Microsoft had to raise prices to compensate for higher chip costs. Memory chip stocks experienced a massive price surge in 2026: Micron rose 229%, SanDisk 581% year-to-date. The market rally could now usher in a revaluation of expectations following this historic price increase.

Structural Concerns Weigh on the AI Trade

Beyond short-term profit-taking, structural risks are emerging. On July 7, 2026, Reuters reported that Chinese AI startup DeepSeek was working on its own chip to circumvent US export restrictions and reduce dependence on Nvidia. This intensified selling sentiment in the sector.

Analysts also warn of a larger risk: Anthropic's Claude 3.5 model shows weaker demand than expected. This could represent a major risk to the entire AI trade, although investors are largely ignoring this for now.

Trade Conflicts Escalate the Situation

Macroeconomic factors are adding to pressure on the tech sector. Trade talks between the US and Canada are breaking down: Canada suspended negotiations, whereupon the US imposed tariffs of 50% on 28 billion dollars in goods starting at midnight on August 24, 2026. Canada plans corresponding retaliatory tariffs.

On July 29, 2026, South Korea's KOSPI Composite fell about 6%, driven by selloffs in Samsung and SK Hynix. Regional markets were caught up in the weakness in the chip sector.

Nvidia Results on Wednesday to Set Direction

Nvidia will release its quarterly results on Wednesday, August 25, 2026 after market close. Analysts rate this report as more significant than Samsung's recent price action. The world's largest AI chip maker is regarded as a barometer for the entire sector—strong results could halt the selling wave, disappointments would intensify downward pressure.

Marvell Technology will also release quarterly results Thursday after market close. These are viewed as an important data point for the next phase of AI development.

Market Outlook: Stabilization or Further Losses?

The NASDAQ Composite was at 25,980.19 points on August 25, 2026, down 0.76%. The S&P 500 lost 0.29% to 7,657.88 points. In the DACH region, the DAX closed at 26,115.5 points (−0.02%), the Euro Stoxx 50 at 6,454.5 points (−0.06%).

The coming trading days could be decisive: if Nvidia and Marvell fail to meet high expectations, the semiconductor sector could suffer further losses. An oversold RSI in SOXL does point to rebound potential—but without positive momentum from quarterly reports, technical support remains fragile.

Longer term, the question is whether the 2026 AI rally is based on sustainable fundamentals or whether the market is revaluing the extreme valuations. The answer should become clearer over the next 48 hours.