Tech firms take fresh hit on Asian markets as earnings misses fan AI fears
Tech firms were again on the back foot on Asian stock markets Friday after another round of disappointing earnings from Wall Street titans fanned already deep concerns about the AI investment boom.In ...
Asian stock markets faced another setback on Friday as tech firms reported disappointments, fueling worries about the AI boom. The Nikkei 225 in Tokyo fell 2.1% to 63,290.11 points, while the Kospi in Seoul dropped 3.5% to 5,730.74 points. Hong Kong's Hang Seng Index declined 1.5% to 23,294.42, and the Shanghai Composite ended down 1.4% at 3,599.02 points.
Concerns about AI-linked tech firms intensified after Amazon's quarterly report missed analyst expectations on profit and revenue, and Intel's expected income fell short due to weak demand for PC processors and supply-chain issues. Alphabet, Google's parent company, saw its shares plunge more than 12% after reporting soft growth in advertising and search business revenues.
Intel's stock dropped by 23%. The Nasdaq experienced a more than 1% decline. The selloff extended to other sectors, with South Korean chipmaker SK hynix losing over 7% and Samsung dropping 3%. Semiconductor firm Kioxia shed more than 7%, while Advantest and SoftBank fell nearly 6%. Taiwan's TSMC declined 1.9%. Tech analyst Anna Wu from Floodlines Research noted that the worry isn't that AI demand has slowed, but that higher funding costs and credit risk might force hyperscalers to scale back their build-out.
The market retreat followed earlier optimism, such as SK hynix's 632% operating profit increase and Anthropic's IPO filing reporting a revenue surge of about 1,300%. However, these results failed to quell concerns about the massive investments firms are making in AI and when they will become profitable, while rising borrowing costs heighten fears over company finances.
The focus now turns to the US midterm elections on Tuesday and their potential impact on the remaining two years of Donald Trump's presidency. Some speculate that Trump could escalate tensions with Iran, which could lead to a surge in oil prices. Despite the recent market downturn, analysts believe the risk of increased US-Iran hostilities remains a greater threat to markets than the midterms.
Written by urgent.news from Gulf Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
