Shares of Indian artificial intelligence-linked companies fell sharply on Monday, mirroring a broader global technology sell-off as investors questioned whether the AI-led rally has outpaced earnings expectations.
Stocks such as Netweb Technologies, Aeroflex Industries, E2E Networks and Black Box declined by as much as 10%, tracking weakness in semiconductor and technology stocks across global markets, according to Moneycontrol.
The risk-off sentiment extended across Asia, where the MSCI Asia Pacific Index dropped as much as 2.2% before trimming losses to trade about 1.5% lower.
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Technology stocks remained under pressure in Europe as well. The STOXX Europe 600 Technology Index fell nearly 2% in early trade, with semiconductor-linked companies including ASML Holding, Infineon Technologies, Aixtron, STMicroelectronics and BE Semiconductor Industries posting declines. Software names such as SAP and Amadeus IT Group, however, bucked the trend with modest gains.
South Korean chipmakers led the sell-off in Asia. Samsung Electronics plunged as much as 10% despite reporting a 19-fold jump in profit, while SK Hynix fell about 6%, dragging the Kospi Index sharply lower. Nasdaq 100 futures also slipped, signalling that Wall Street's technology rebound may be losing steam.
The latest correction comes after a record quarter for U.S. semiconductor stocks, as investors reassess whether heavy AI-related capital expenditure, rising competition and rapid capacity expansion can generate enough earnings growth to justify elevated valuations.
Adding to the cautious mood, investor Michael Burry, known for predicting the U.S. housing market crash portrayed in The Big Short, reiterated his scepticism about the memory-chip cycle.
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In a post on Substack, Burry disclosed that he had shorted shares of Micron Technology, saying the company "defines cyclical like no other."
Burry argued that South Korea's aggressive investment plans in semiconductor manufacturing could accelerate capacity expansion and bring an earlier-than-expected end to the current shortage of dynamic random-access memory (DRAM) chips used in AI data centres, smartphones and personal computers.
Samsung, SK Hynix and Micron currently account for roughly 90% of the global DRAM market and produce the high-bandwidth memory chips paired with Nvidia's graphics processing units. However, Bloomberg reported that the industry's supply-demand balance could come under pressure as governments increasingly treat semiconductor manufacturing as a strategic priority.
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