Technology shares fell across Asia after a sharp Nasdaq decline, as investors questioned whether the vast cost of AI infrastructure can deliver sufficient returns amid higher interest rates.
Asian shares began the week under pressure on Monday after Wall Street’s technology sector sold off sharply, with investors reassessing the scale and profitability of the artificial intelligence build-out. According to Reuters, the decline followed a weak session in which the Nasdaq Composite fell more than 2%, dragged lower by large-cap names including Microsoft, Nvidia, AMD and Amazon. Traders are increasingly questioning whether the huge sums being committed to chips, data centres and power supply can be justified by future revenue.
The market anxiety has been sharpened by concern around CoreWeave, the closely watched “neocloud” provider whose debt load has unsettled investors. Reuters reported that the company’s shares have fallen roughly 30% this month as bond yields climbed, a sign of rising scepticism over its finances. Nvidia chief executive Jensen Huang had offered some reassurance last week, which helped stabilise sentiment briefly in Asia, but that support faded as risk appetite weakened again at the start of the new week.
The sell-off spilled into several Asian markets. In Tokyo, shares in SoftBank, Advantest and Tokyo Electron weighed on the benchmark, while Seoul was pulled lower by losses in chipmakers SK hynix and Samsung. Market weakness also extended to Taipei, Shanghai, Sydney, Singapore and Wellington, although Hong Kong was shut for a holiday. Analysts said the move reflected not only concerns about the AI trade, but also the impact of higher interest rates on companies that depend on borrowing to fund expansion.
Attention is now turning to the Federal Reserve’s next policy decision after hotter-than-expected US inflation data lifted expectations of a further rate increase. Higher borrowing costs are a particular risk for technology groups whose investment plans are heavily debt-financed. In the broader market, Reuters noted that China reported third-quarter growth of 4.5%, slightly above forecasts, although that figure did little to alter the mood. Oil prices also eased after a strong rally late last week, while the euro came under pressure amid worries about France’s economy and the unrest linked to cost-of-living protests.
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