Big tech earnings stoke fresh unease across Asian chip stocks

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Photo by GREG BAKER/AFP via Getty ImagesAsian chip stocks are taking another hit from U.S. tech earnings, with Intel Corp.’s weak outlook raising concerns about semiconductor demand while Amazon.com Inc.’s post-results slump further sours sentiment toward the AI trade.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe declines extend a rough stretch for technology stocks as investors become less forgiving of earnings disappointments after a powerful AI-driven rally. A Bloomberg gauge of Asian chipmakers dropped as much as 4.8 per cent Friday. South Korea’s SK Hynix Inc. and Japan’s Advantest Corp. fell more than nine per cent each before paring losses, while Taiwan Semiconductor Manufacturing Co. dipped over two per cent.This advertisement has not loaded yet, but your article continues below.Results from major technology companies have sharpened scrutiny of both the durability of semiconductor demand and whether the huge sums being poured into AI will generate sufficient returns. Intel projects the personal-computer market slump will persist through at least the first half of 2027. Amazon’s free cash flow sank further into negative territory due to huge AI spending, while even robust growth at its cloud business fell short of expectations.Canada's best source for investing news, analysis and insight.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Investor will soon be in your inbox.We encountered an issue signing you up. Please try again“This earnings season has been tough on AI players, with most getting punished against a backdrop of AI bubble and inflation fears,” said Anna Wu, an investment strategist and founder of Floodlines Research. “Higher funding costs and credit risk could eventually force hyperscalers to slow their build-out.”The selloff has gathered momentum again in October after a brutal summer on worries from AI infrastructure funding to the longevity of the memory cycle. The Bloomberg Asian chip gauge is down about 13 per cent this month, while South Korea’s chip-dominated benchmark Kospi has slid 17 per cent. Taiwan’s Taiex is poised to enter a correction with Friday’s decline.This advertisement has not loaded yet, but your article continues below.“AI scepticism remains a permeating theme across Asian tech and chip stocks today,” said Tim Waterer, chief market analyst at KCM Trade. “The reaction in Asian chip stocks reflects the market’s ongoing focus on whether the current AI spend can be monetized at the pace investors had hoped.”There have been bright spots in recent chipmaker reports, including SK Hynix’s bumper profits and generous shareholder returns package. But the market is growing harder to impress, as seen with negative reactions to Samsung Electronics Co.’s payout plan delay and Sandisk Corp.’s results.Intel’s outlook mainly disappointed on weakness in the PC market, which it projects will decline 10 per cent next year following a 12 per cent slide in 2026. That weighed on Asia’s computer stocks, with shares of Lenovo Group Ltd. and Asustek Computer Inc. dropping more than seven per cent each Friday.Upcoming U.S. midterm elections will be a focal point for investors, with the rising pushback against data-center construction featuring in candidates’ campaigns. With most big reports now out of the way, the crowning event will be earnings due Nov. 17 from Nvidia Corp.“Nvidia’s results would could be the last chance we have to lift the mood during this results season,” said Floodlines’ Wu.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.