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Shikhar Gupta · · 3 min readAsian tech stocks slide as investors question AI valuations
Tech stocks fell across Asian markets on Monday, as investors questioned whether the AI-driven rally has run ahead of what the sector can actually deliver. South Korea, where technology and semiconductor shares have been among the region’s top performers this year, bore the brunt of the sell-off.
The benchmark Kospi fell as much as 8.8% in morning trading, triggering a 20-minute circuit breaker that temporarily halted trading. It later closed 8.3% lower at 7,484.41, its steepest daily decline since March 4.
Screens displaying Japanese company stock prices / Photo credit: Ned Snowman / Shutterstock
Shares of chip manufacturers Samsung Electronics and SK Hynix fell 10.2% and 7.7%, respectively.
Investors were also concerned over the stability of the ceasefire between the US and Iran, as Israel and Iran exchanged strikes on Monday for the first time since the ceasefire took effect two months ago.
Across the region, Japan’s tech-heavy Nikkei 225 closed 3.9% lower while the broader index, Topix, fell 2.5%. Shanghai’s CSI 300 declined 1.8%, and Hong Kong’s Hang Seng Index ended 1.2% lower.
In Singapore, the blue-chip Straits Times Index closed 1.7% lower at 4,963.67 points on Monday, with chip stocks among the worst performers.
AI spending fears
Investors were likely spooked by fears of the AI rally overheating, with tech stocks taking a hit globally, said analysts.
Swissquote analyst Ipek Ozkardeskaya said the steep drop in memory chipmakers was being driven by fundamental headwinds, including reports that Nvidia’s next-generation Vera Rubin platform will use significantly less dynamic random access memory (DRAM) than expected. Broader AI infrastructure spending may also be losing momentum, she noted.
Anthropic recently called for safeguards that could halt frontier AI development. Combined with a cautious AI chip revenue outlook from US semiconductor developer Broadcom, these factors have “taken a fair amount of air out of (the sector’s) balloon,” she added.
Concerns were further amplified by unexpected fundraising announcements from several AI-related companies.
However, some institutional observers view the sharp pullback as a localized phenomenon rather than a structural shift. Mathieu Racheter, head of equity strategy research at Julius Baer, noted that the global sell-off was heavily concentrated in crowded momentum stocks.
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South Korea’s Kospi suffered its steepest daily decline since March as concerns over AI spending and rising geopolitical tensions rattled markets.
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