Asian stock markets opened in negative territory after a wave of selling swept through the US amid a sharp drop in technology shares. The main blow fell on securities linked to artificial intelligence, primarily chipmakers and companies within the AI supply chain. Regional indices followed US futures and opened lower.
The largest US indices closed in the red. The Nasdaq fell more sharply than the broader market, reflecting the high concentration of technology companies in that index. Investors are concerned about whether the multibillion-dollar spending on AI by technology giants will pay off, and when companies will be able to reach the expected profits. Doubts also concern the valuations of companies that grew on the wave of expectations surrounding AI.
The most vulnerable Asian markets are Japan, South Korea and Taiwan, where semiconductor companies carry a particularly large weight in the indices. Their decline pulled down regional benchmarks. Markets in Hong Kong and mainland China also traded weaker. The heavyweights of the semiconductor sector became the main source of pressure on regional benchmarks.
Among the reasons for the sell-off, investors cite doubts about the fairness of current valuations of AI companies and about the timing of returns on their investments. An additional factor was concern over the large capital expenditures of technology giants. Against this backdrop, part of the capital is leaving expensive fast-growing stocks, reflecting a broader rotation by investors.
It remains unclear whether the decline will deepen or the markets will stabilize. The duration of the surge in negative sentiment around AI also remains uncertain. Further developments may also depend on central bank policy, which could influence the recovery of the markets.