China's Kimi K3 Deepens AI Rout as Apple Tops Nvidia, Netflix Craters

A fresh AI sell-off swept Wall Street on Friday after China's Moonshot AI unveiled the low-cost Kimi K3 model, reviving fears that hyperscaler spending on chips is unsustainable. Apple briefly overtook Nvidia as the world's most valuable stock as the rotation out of semiconductors accelerated, while Netflix lost over $100 billion in market cap on a gloomy Q3 outlook. Goldman Sachs said the momentum unwind is nearing its end, while defensive plays like UnitedHealth and Travelers provided a safe haven.

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China's Kimi K3 model triggers a fresh wave of AI selling. Moonshot AI's new model challenges assumptions behind Silicon Valley's massive AI spending, deepening the semiconductor bear market and renewing DeepSeek-like fears. 1 2

Apple reclaims the world's most valuable company title from Nvidia. Apple's $4.88 trillion valuation edged Nvidia's $4.86 trillion as the chipmaker's 3.5% drop shifted the AI leadership hierarchy. 3

Netflix loses $100 billion in market cap after weak Q3 outlook. Shares plunged over 11% as the streaming giant's Q3 revenue and subscriber guidance missed consensus, erasing its price hike gains. 4

TSMC's record quarter fails to calm AI bubble fears. The world's largest chipmaker posted a 77% profit jump but raised its 2026 capex to $64 billion, spooking investors worried about spending returns. 5 6

Travelers and UnitedHealth surge as investors flee tech stocks. Travelers jumped 9% on a 46% profit jump, while UnitedHealth beat Q2 estimates by 30%, highlighting a strong rotation into defensive sectors. 7 8

Goldman Sachs says tech stock deleveraging is nearing its end. Goldman noted the momentum unwind is the fastest on record, but a catalyst for a sustained reversal remains absent. 9