Asia tech stocks extend sell-off as investors sour on AI-linked names
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Asian tech stocks extended their sell-off on Monday as investors grew uneasy about global AI-related games and the U.S. tech-heavy Nasdaq index lost more than 4.5% last week.
South Korea’s Kospi Index memory chip giants and heavyweights Samsung Electronics and SK Hynix fell 5% and 2%, respectively. The Kospi lost as much as 8%, with the two companies accounting for more than 40% of the index.
Taiwan Semiconductor Manufacturing CompanyTSMC fell 2.1%, while Hon Hai Precision, also known as Foxconn, fell 5.1%.
Japanese technology investor Softbank Group Tokyo Electron and Advantest fell 6.7% and 5%, respectively, while losing 7.5%.
The declines in share prices follow a recent rally in Asian tech stocks, fueled by investor optimism about demand for artificial intelligence. Last month, SoftBank recently became Japan’s most valuable company, as Samsung Electronics and SK Hynix each passed the $1 trillion market valuation mark.
The selloff in tech names was triggered after Broadcom’s fiscal second-quarter earnings missed market forecasts last week, sending its shares plunging and causing a cascading effect on the tech sector.
VanEck Semiconductor ETF (SMH) lost over 9% on Friday; Softbank’s British chip company Arm Holdings lost nearly 13%, while Micron Technology fell more than 13%.
“The tech-led rout has wiped nearly $1.8 trillion from the S&P 500 market cap,” according to a June 8 note from UOB.
But UOB said technology and software companies will continue to be in the spotlight “with what could be the largest-ever IPO by a space exploration/AI/technology company debuting on Nasdaq on Friday (June 12).”
Asian markets also fell on Monday as a new escalation in the Iran war signaled the conflict is far from over.
