Semiconductor stocks fell on Wednesday as a record profit from memory maker SK Hynix failed to lift the sector, further unwinding the AI trade, with a hawkish interest rate hold from the Federal Reserve also weighing on sentiment. The PHLX Semiconductor Index fell more than 5%, extending losses from the prior session. AI chip heavyweight Nvidia stock dropped more than 3%, while peer AMD fell roughly 5%. Memory and storage makers Micron and SanDisk pared losses, down 9% and 7%, respectively. SK Hynix reported a record second quarter operating profit, which rose 557% from a year earlier but fell short of lofty expectations, fueling investor concerns about whether AI-related spending can sustain its rapid pace. US listed SK Hynix shares dropped more than 2%. The earnings miss reflected a less favorable product mix rather than weakening demand for AI memory chips. Management reiterated that demand is expected to outpace supply through 2030. The South Korean memory maker also said it plans to boost 2026 capital spending by roughly 50% to at least $31 billion as it ramps up AI memory production, raising investor concerns about potential overinvestment in AI infrastructure. Barclays analysts cut their price target on US-listed stock to $300 from $330 following the results, but still maintain an Overweight rating.