Micron Technology's post-earnings sell-off serves as another reminder to global investors of the inherent risks in betting on artificial intelligence chip manufacturers.

Days after the stock price of leading artificial intelligence chip manufacturer Nvidia (NVDA.US) plummeted nearly $500 billion, Micron's stock price fell about 8% in after-hours trading as the memory manufacturer's outlook was lower than expected. The news also led to a drop in the stock prices of South Korea's two largest companies, Samsung Electronics and SK Hynix, both of which are suppliers of storage chips to the artificial intelligence supply chain, demonstrating the extreme volatility of artificial intelligence-related stocks.

Micron is one of many companies benefiting from the frenzy surrounding artificial intelligence-related stocks, with its high-bandwidth memory being used alongside Nvidia's industry-leading chips as a candidate chip for training large language models. In the year leading up to the report released on Wednesday, the company's stock price more than doubled, but even with a outlook roughly in line with analysts' average expectations, the company was punished for failing to beat high expectations.

Andrew Jackson, Japan stock strategy director at Ortus Advisors Pte based in Singapore, said: 'The market has completely unrealistic expectations, with many stocks being sold off that are far beyond the market's expectations.' 'But I think Wall Street is very clear that these American stocks are being hyped up. Too many paper investors are chasing quick money.'

Earlier this week, the momentum of the global artificial intelligence boom was hit when Nvidia's stock price entered a range of pullbacks on Monday before rebounding. The global index tracking semiconductor stocks has fallen about 5% since hitting a historical high earlier this month.

For companies like Micron, this means a great deal of uncertainty in their stock prices, as their traditional output provides memories for personal computers, smart phones, and more traditional data centers, which are still recovering from the downturn last year.

Tom Kang, director of Counterpoint Research, said Micron's performance did not match SK Hynix's announcement earlier that its HBM production capacity would be almost sold out by 2025. He added that Micron lacks the dominance in AI memory that SK Hynix enjoys and that it also lacks the dominance in the wider memory industry that Samsung possesses.

Kang said, 'This poses a real test for the field of artificial intelligence, which still appears to be in a bubble.'

Large American stocks seen as benefiting from artificial intelligence continue to rise, pushing their stock prices to all-time highs. Micron Technology's stock price is 4.5 times expected sales over the next 12 months, while its average P/E ratio over the past 10 years is only 2.2 times.