On Thursday, Asian technology stocks fell sharply, mirroring the decline of U.S. tech stocks in overnight trading. Notable losses included SoftBank Group, which dropped 4.36%, and SK Hynix, which fell 9.71%. Other significant declines were seen in Tokyo Electron (down over 5%), Advantest (down 2.14%), and Kioxia (down 8.84%). In South Korea, Samsung Electronics also saw a decline of 6.13%.
This volatility comes amid concerns regarding the sustainability of aggressive AI spending, prompting investors to sell off tech stocks. However, J.P. Morgan analysts expressed optimism, stating that the recent sell-off has not disrupted the ongoing AI investment cycle and that they do not foresee any fundamental weaknesses in the tech sector over the next 6-12 months.
S&P Global also highlighted that global growth is increasingly driven by AI and defense spending, with a notable increase in the global purchasing managers' index output of tech equipment in July, marking the fastest growth since May 2021. This suggests that despite the current market fluctuations, the technology sector remains a critical source of momentum for global economic growth