AI trade reversal pierces Asia’s star picks-and-shovels stocks
The recent sell-off in US technology stocks is exposing vulnerabilities in Asia's artificial intelligence trade, as mounting financing costs could choke off the spending needed to sustain the boom. This has intensified as oil prices surged to US$110 a barrel, stoking inflation concerns and leading investors to focus on the trillions of dollars being borrowed to build AI infrastructure.
The implications could be significant for Asia, where chipmakers and hardware suppliers have been among the biggest beneficiaries of the AI frenzy. A Goldman Sachs Group basket of regional AI hardware stocks tumbled 11% last week, with standout performers like Nan Ya Plastics and Unimicron Technology experiencing sharp declines.
The concern now extends beyond whether demand for AI chips will hold up, to whether hyperscalers and neocloud operators can keep financing the infrastructure needed to deploy them, and whether the expected returns will justify the scale of investment.
Brief written by urgent.news from Straits Times Business's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
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- AI funding fears puncture rally in Asia’s high-flying picks-and-shovels stocks businesstimes.com.sg
