WS #15943
The Korean stock market (Kospi) suffered a severe 7.57% crash, driven by SK Hynix posting its worst weekly loss since 2008, a decline compounded by leveraged funds collapsing by 77%. This event highlights deepening credit stress for AI-related borrowers and data center infrastructure, as investors dump bonds and equities in the semiconductor supply chain. The selloff in Asian tech creates a negative spillover risk for global semiconductor equipment and memory stocks, although US-based players like Micron are seeing some institutional support via dark pool activity. Despite macro headwinds, major technology companies are accelerating capital expenditure and M&A activity in the AI sector. Intuit has acquired AI-native revenue management platform Sequence, while reports indicate that Amazon, Microsoft, Google, and Meta plan to spend up to £760 billion on AI infrastructure in 2026. Additionally, Apple Intelligence has received regulatory approval in China, opening a significant new market for its AI capabilities. These developments underscore the long-term commitment of megacaps to AI, providing a floor for valuations even as broader market sentiment weakens due to inflation.
Asian Semiconductor Stress
The Korean stock market (Kospi) suffered a severe 7.57% crash, driven by SK Hynix posting its worst weekly loss since 2008, a decline compounded by leveraged funds collapsing by 77%. This event highlights deepening credit stress for AI-related borrowers and data center infrastructure, as investors dump bonds and equities in the semiconductor supply chain. The selloff in Asian tech creates a negative spillover risk for global semiconductor equipment and memory stocks, although US-based players like Micron are seeing some institutional support via dark pool activity.
Despite macro headwinds, major technology companies are accelerating capital expenditure and M&A activity in the AI sector. Intuit has acquired AI-native revenue management platform Sequence, while reports indicate that Amazon, Microsoft, Google, and Meta plan to spend up to £760 billion on AI infrastructure in 2026. Additionally, Apple Intelligence has received regulatory approval in China, opening a significant new market for its AI capabilities. These developments underscore the long-term commitment of megacaps to AI, providing a floor for valuations even as broader market sentiment weakens due to inflation.