Seoul: The unstoppable rally in artificial intelligence (AI) stocks has started to end, with tech focused Asian markets in South Korea and Taiwan declining due to a decline in AI- and tech-related stocks. This sudden downturn has seen investors scrambling to pull out of high flying technology giants, as they raise questions about the massive AI boom starting to lose steam.
On opening, South Korea’s Kospi index plunged nearly 9%, forcing a halt in trading due to the circuit breaker mechanism. Similarly, Japan’s Nikkei 225 index also fell by 4.5% as shares of major tech companies fell.
Among the companies, shares of South Korea’s SK Hynix, the world’s leading manufacturer of High Bandwidth Memory (HBM) chips used in high end AI servers, saw a steep 9.92% decline while Samsung Electronics fell 6.40% in a single trading session.
This sell-off was triggered after Iran and Israel struck each other with missiles for the first time in two months, in response to Israel’s strikes in Southern Lebanon, even as ceasefire talks were underway.
Besides that, Brent crude prices jumped 4.6% to reach $97.34 a barrel in Asia as the strikes continued between the two countries.
Over the past year, tech stocks have shot up almost vertically, with their valuations being far too stretched. Besides that, many large investment funds have decided to exit these investments, as they know that the prices don’t match reality, triggering a rush to pocket profits.
