Global technology stocks that had risen on the back of the artificial intelligence (AI) investment boom fell together on the 26th. The headwinds that hit U.S. tech stocks overnight also dragged down tech shares in Asia, including Japan, Korea and Taiwan.
Some analysts said the correlation in global stock markets lifted by the AI investment boom has grown more than ever, speeding up the transmission of risk. As infrastructure corporations such as semiconductors and power that underpin hyperscalers' massive AI investments form a chain of beneficiaries, tech stocks embedded in these ecosystems are moving as if they were a single market.
On the 26th, Asian stock markets were broadly weaker. In the Tokyo market, SoftBank Group plunged more than 12% intraday, and semiconductor-related names such as Advantest and Tokyo Electron also fell. In Taiwan, TSMC and Foxconn (Hon Hai) weakened. In the domestic market, Samsung Electronics and SK hynix slumped around 9% intraday, deepening the KOSPI index's decline. Weakness in U.S. tech stocks spread to Asian chip stocks overall, sharply denting investor sentiment.
Overnight in New York, Micron jumped after it released a surprise earnings report, but Apple laid out plans to raise product prices, citing the burden of higher memory costs, rapidly chilling investor sentiment toward tech stocks.
As concerns grew that rising semiconductor prices could squeeze big tech profitability, major tech names such as Apple and Microsoft fell, and that impact carried straight into Asian markets.
The sight of markets moving in sequence across countries has become more pronounced recently. Just a few days ago, overseas analysis said the reverse happened, with the shock to Korean stocks serving as a catalyst for weakness in global tech shares.
On the 23rd, Samsung Electronics and SK hynix each plunged around 12%, the KOSPI tumbled 10%, and European and U.S. markets then fell, led by tech. At the time, Nikkei said reporting on delays in SK hynix's conversion of its HBM4 production line stoked worries about softening AI demand, and Bloomberg and Reuters also assessed that volatility in Korean stocks became the starting point for global tech selling.
Industry watchers said expectations for AI investment, rather than the AI industry itself, are undergoing a reset. In particular, while there is little change in the AI industry's long-term growth prospects, given the heightened correlations among global tech stocks that had been moving in tandem on AI investment hopes alone, there is an outlook that volatility could broaden across countries for the time being.
Yang Hyeong-mo, a researcher at DS Investment & Securities, said, "The market has begun to revisit the actual numbers on AI revenue, and a process is underway to narrow the gap between growth expectations that shares had priced in and reality," adding, "The key variable is whether sales growth can actually follow to the extent that it justifies AI infrastructure investment and data center expansion."
Yang said, "Recently, the intensifying price competition from Chinese AI models, the funding burdens on AI corporations, and the potential moderation in the pace of data center investment are being highlighted at the same time," explaining, "While there is no change in technological advancement itself, the market has begun to revalidate the rosy scenario for AI investment, and in that process, volatility across AI-related asset is expanding."