AI trade reversal pierces Asia’s star picks-and-shovels stocks
The pressure intensified last week as oil surged to $110 a barrel for the first time since May, stoking inflation concerns, and investors turned their attention to the trillions of dollars being borrowed to build AI infrastructure
Mounting financing costs for AI infrastructure could choke off spending needed to sustain the AI boom in Asia, exposing a new vulnerability to the region's stock-market rally. The pressure intensified last week as oil prices surged, fueling inflation concerns. The sell-off in US technology stocks exposed how concerns over AI spending could spread across the hardware supply chain.
Asia's chipmakers and suppliers, among the biggest beneficiaries of the AI frenzy, saw their stocks tumble. Despite an upbeat revenue outlook from Taiwan Semiconductor Manufacturing Co, the sell-off showed little sign of abating. Concerns over AI spending are spreading, with Goldman Sachs' basket of regional AI hardware stocks down 11 percent last week.
Some of Asia's standout performers suffered particularly hard losses, with Nan Ya Plastics, Unimicron Technology, and Samsung Electro-Mechanics all down over 12 percent in a week. The main worry is not demand for AI chips, but whether hyperscalers and neo-cloud operators can keep financing the infrastructure needed to deploy them.
Rising borrowing costs could make infrastructure projects harder to finance and delay spending, potentially triggering a reset in Asian suppliers' earnings expectations and valuations.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
- AI funding fears puncture rally in Asia’s high-flying picks-and-shovels stocks businesstimes.com.sg
- AI trade reversal pierces Asia’s star picks-and-shovels stocks straitstimes.com
