Morning bid Europe: AI's reality check
TSM•Investors sold chipmakers and other technology stocks on Friday, as concerns about data-centre development and the returns on AI investment sent Asian shares lower and bonds higher. TSMC shares hit limit down at the open in Taipei, while South Korea's KOSPI was down about 5%.
1. AI stocks sell off
Investors abandoned chipmakers at the forefront of the AI boom on Friday, with margin calls spreading across Asia and bonds surging as technology bets reversed. The sell-off followed concern that a Democratic election sweep could slow data-centre development, alongside doubts about whether large AI investments will generate sufficient returns.
2. Pressure spreads across markets
TSMC shares hit limit down at the open in Taipei, where the market was set for its largest weekly loss since 1999. South Korea's KOSPI rose from nine-month lows after authorities moved to relax margin rules, but remained down around 5%; Nasdaq 100 futures struggled to hold a bounce.
3. Bonds and credit in focus
Short-term bonds surged as investors sought safety and reconsidered whether central banks would be inclined to raise rates if AI infrastructure construction, spending and hiring slowed. The cost of default insurance at AI investor SoftBank rose to a four-year high, while US technology-sector credit came into focus for signs of pressure or reduced access to debt funding.
