Profit-Taking Sends Asian Tech Stocks Tumbling, but Institutions Say Long-Term AI Trend Remains Intact
Asian technology stocks followed Wall Street lower on June 8, 2026. South Korean shares triggered an intraday circuit breaker and closed down 8.29%, while the Nikkei 225 fell 3.85%. Turnover in Taiwan stocks quickly reached NT$93.031 billion in early trading. Taishin Investment Advisory said markets were digesting concerns over AI valuations and interest rates, but expansion plans from TSMC and NVIDIA continued to support medium- to long-term demand across the Taiwanese and South Korean semiconductor supply chains.
The latest wave of selling intensified again on July 17, 2026, when Taiwan’s benchmark plunged 2,953.71 points, or 6.47%, to close at 42,671.27. Foreign investors were net sellers of NT$189.038 billion, while investment trusts bucked the trend with net purchases of NT$9.502 billion. Nomura Asset Management said the main drivers were a stronger U.S. dollar, deleveraging in South Korean stocks and profit-taking after an extended rally. Corporate earnings and AI orders had not weakened in tandem.
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The history behind this eventAsian Stocks, Chipmakers Tumble as AI Spending Fears Mount
The artificial-intelligence boom has driven Nvidia and other technology giants to pour capital into data centers, advanced chips and power infrastructure, lifting valuations across Asia’s semiconductor supply chain. Investors are now questioning whether that spending can generate sufficient revenue and returns, leaving the chip-heavy markets of Taiwan and South Korea particularly exposed to a reassessment of growth expectations and elevated valuations.
Asian equities and chipmakers sold off sharply on July 28, with Taiwan’s benchmark index falling below 42,000 points in intraday trading and South Korean shares again triggering a market circuit breaker. The retreat reflected mounting doubts over the durability of AI infrastructure investment by Nvidia and other major technology companies. Investors are turning to upcoming Big Tech earnings for evidence that rising AI-related expenditure is being matched by stronger sales, cash flow and profits.
Chip Selloff Batters Asian Stocks, Tests Confidence in AI Boom
The global artificial intelligence boom sent shares of semiconductor giants including TSMC and Nvidia soaring over the past year, repeatedly lifting Asian markets to record highs and making the companies central pillars of global technology stocks. But with corporate valuations at historic highs, investors are questioning whether AI capital spending can quickly translate into actual revenue. The correction has therefore become a crucial test of long-term confidence in AI investment.
In the latest development, Asian markets tumbled across the board under semiconductor selling pressure on July 17, 2026. Taiwan’s benchmark index plunged 2,953 points at the close, its largest one-day point decline on record, while Japan’s Nikkei 225 fell more than 4%. The selloff was driven mainly by TSMC’s July 16 announcement that it would raise this year’s capital spending to $60 billion–$64 billion, fueling concerns about returns on AI investment and the diversion of capital from other uses. Major semiconductor stocks including Tokyo Electron slumped.
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