SoftBank shares crash 13% over inflated valuations of AI companies
What's the story
SoftBank's shares have plummeted by a staggering 13% in Asian trading on Wednesday. The fall comes as a result of a sell-off on Wall Street, driven by concerns over the valuations of artificial intelligence (AI) companies. This decline has subsequently affected Asian indices, with semiconductor and AI-linked shares witnessing sharp losses in the trading session today.
Market impact
Semiconductor companies bear the brunt of the sell-off
The sell-off has hit semiconductor testing equipment manufacturer Advantest, which has fallen by over 8% in Asian trading today. Chipmaker Renesas Electronics is also down by 6%. South Korean giants Samsung Electronics and SK Hynix have also been affected, both witnessing a 6% decline. However, despite this downturn, Samsung's shares are still up over 80% year-to-date while SK Hynix has more than tripled with a staggering rise of 210%.
Global effects
Asian tech stocks mirror Wall Street's overnight sell-off
The world's largest chip manufacturer, Taiwan Semiconductor Manufacturing Company (TSMC), has seen its shares fall by over 3%. Alibaba in China has also been affected by the sell-off while Tencent is down by 2%. The Asian tech stocks are mirroring the sell-off observed on Wall Street overnight, led by Palantir which fell over 8% in regular trading despite beating earnings expectations.
Market concerns
Veteran market analyst warns of looming 'AI correction'
Louis Navellier, a veteran market analyst, has warned of an impending "AI correction." He wrote in a note that if such a correction occurs, it could drag the rest of the market down with it due to the heavy weight of leading names. The warning comes as US-linked tech stocks like NVIDIA also fell overnight after Michael Burry, known for predicting the 2008 financial crisis, revealed his short positions on Palantir and NVIDIA.