Tech rout deepens from Wall Street to Tokyo as investors question trillion-dollar AI valuations
Tokyo, November 07 (Market Insider) – Asia-Pacific markets tumbled on Friday, echoing Wall Street’s sharp sell-off as the once-unstoppable rally in artificial intelligence stocks began to crack under its own weight. The global tech correction—led by giants like Nvidia, Microsoft, and Palantir—has sparked fears that the “AI trade” fueling 2024’s market boom may finally be overheating.
Japan bore the brunt of the downturn. The Nikkei 225 plunged 1.93% as major AI-linked names were pummeled: SoftBank sank more than 8%, semiconductor tester Advantest dropped over 7%, and Renesas Electronics and Tokyo Electron both declined. The broader Topix index lost nearly 1%. South Korea’s Kospi slid 1.47%, while Australia’s ASX 200 fell modestly by 0.27%. Hong Kong’s Hang Seng Index and China’s CSI 300 each retreated amid investor anxiety ahead of Beijing’s October trade data, which economists expect will show slowing exports and shrinking imports—a sign that China’s fragile recovery is faltering again.
The regional losses followed a punishing session in New York, where the Nasdaq Composite dropped 1.9% and the S&P 500 shed 1.12% as investors rotated out of high-growth tech stocks. Nvidia, whose $3 trillion market cap once symbolized the AI boom, has now erased hundreds of billions in value since its recent peak. Microsoft, Palantir, Broadcom, and AMD also extended declines, raising questions over whether AI’s lofty valuations are sustainable in a world of tightening liquidity and slower corporate earnings.
Analysts warn that sentiment around AI may be entering its first real stress test. “Investors are starting to price in the reality that not every company labeled ‘AI’ will deliver exponential profits,” said one Tokyo-based strategist. “The hype cycle is cooling, and markets are recalibrating expectations.”
For now, traders across Asia and beyond are bracing for more volatility as U.S. futures hint at a fragile rebound. But if Friday’s sell-off signals a broader shift in risk appetite, the global market’s most powerful growth story could be facing its first existential question: Has the AI bubble already peaked?
What do you think—are we witnessing a healthy correction or the beginning of an AI reckoning?
