Global tech rout: the long shadow of AI sweeps across Asia and global markets

The correction in technology stocks has turned into a full-blown global wave, hitting Asian markets hard after the heavy sell-off seen on Wall Street. The MSCI Asia Tech Index closed its fifth negative session in six days, with giants such as Samsung Electronics and SoftBank among the main drivers of the decline. Leading the losses was South Korea’s Kospi, a symbol of Asia’s bet on artificial intelligence, which plunged 3.9%.

Sentiment worsened further following disappointing earnings from Alphabet, Qualcomm, and Arm, fueling concerns over valuations that are increasingly difficult to justify and an AI investment race that is becoming ever more costly. In the United States, the tech sector remains under pressure as well: the Nasdaq 100 recorded its worst two-day drop since October, breaking below its 100-day moving average—a technical signal that many analysts view as a precursor to further declines. The so-called “Magnificent Seven” index fell 1.8%, while hundreds of billions of dollars were wiped off the market capitalization of technology companies in just a few days.

In Asia, Hong Kong’s Hang Seng Tech Index is now close to bear market territory, weighed down also by fiscal uncertainty and profit concerns in China. “We are witnessing the unwinding of overly crowded trades,” strategists note, with a clear rotation toward more defensive sectors.

The nervousness has spilled over into other asset classes. Precious metals, which had staged a spectacular rally in recent weeks, saw a sharp reversal: silver at one point plunged as much as 17%, while gold fell by more than 3%. Bitcoin also extended its losses, sliding toward the $70,000 threshold. Against the backdrop of a still-solid U.S. economy, markets are now questioning the sustainability of the AI boom and the price to be paid for growth driven by technological euphoria.

Andrea Pelucchi