Asian stocks plummet after investors sell AI stocks

A foreign exchange trader walks past a screen displaying the Korean Composite Stock Price Index (KOSPI) and the exchange rate between the US dollar and the South Korean won in the foreign exchange trading room at Hana Bank headquarters in Seoul, South Korea
Ahn Young-joon / AP
Asian stock markets closed sharply lower on Friday (26), led by markets in Japan and South Korea, amid a wave of selling of shares of companies linked to artificial intelligence (AI).
Tokyo's Nikkei 225 index fell 4.4%, while South Korea's Kospi fell 7.7%. In Hong Kong, the Hang Seng lost 1.9%, and China's Shanghai Composite index fell 2.1%.
The drop comes after a sequence of strong valuations driven by enthusiasm around artificial intelligence. At the beginning of the week, both the Nikkei and the Kospi had reached historic highs.
According to analysts, this Friday's movement does not reflect a worsening in the outlook for the AI sector, but rather profit taking. This happens when investors sell shares that have risen a lot to guarantee the gains obtained, a common practice after periods of strong appreciation.
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The correction was also influenced by the recent volatility in global markets, which have reacted quickly to news involving artificial intelligence, in addition to other factors, such as the price adjustment announced by Apple.
On Thursday (25), the United States stock exchanges closed without a single direction. While several artificial intelligence companies rose again, Apple's shares fell after the company announced price increases on several of its products.
This Friday's mass sale does not mean that artificial intelligence is "distributing dividends" or that the sector has lost strength. The movement only indicates that part of the investors chose to pocket the profits accumulated after the strong recent appreciation of shares in the sector.
Micron surpasses Meta and Tesla driven by AI
The memory chip manufacturer Micron Technology surpassed, this Thursday (25), for the first time, the market value of Meta and, for a brief period, also that of Tesla, after publishing a financial forecast above expectations for the fourth quarter.
The company's shares rose 18.4%, increasing its market value to US$1.398 trillion. At the same time, Meta was valued at US$ 1.392 trillion, while Tesla had a market value of US$ 1.4 trillion.
On Wednesday (24), Micron projected revenue and profit for the fourth quarter above market estimates, which boosted the share recovery after a recent fall.
Micron logo in illustration. The company surpassed Meta and Tesla in market value driven by demand for artificial intelligence chips.
Dado Ruvic/Reuters
The company also reported that its customers have already committed US$ 22 billion in orders to guarantee the supply of memory chips.
Micron surpassed the US$ 1 trillion mark in market value on May 26, after the entry of South Korean Samsung Electronics into this group.
Memory chip manufacturers have been driven by investor interest in companies that provide components for large technology companies' investments in artificial intelligence infrastructure.
*With information from AP and Reuters.

Source: G1