As Nikkei Bleeds, Kioxia’s Boom-to-Bust Highlights Dangers of This AI Cycle

Japan’s Nikkei 225 sold off sharply, falling as much as 4.4% as investors dumped AI-linked chip stocks amid growing fears the sector’s rally is overheating. The biggest cautionary tale is Kioxia, which dropped nearly 16% on the day and has now fallen 52% from last month’s peak after soaring more than 600% since January. The reversal has erased about ¥30 trillion ($185 billion) in market value and highlights how quickly AI enthusiasm can turn into a boom-bust cycle. Broader weakness hit related names such as Advantest, SoftBank, and TSMC, while a Wall Street chip gauge also fell more than 4%. The article argues that retail leverage, Bain Capital’s full exit, and concerns that memory-chip prices are stabilizing are adding pressure. Despite the selloff, analysts still see upside for Kioxia over 12 months, but the market action signals rising skepticism around the broader AI trade.