China AI shares tumble as Wall Street rout deepens selloff across Asia tech

China AI shares tumble as Wall Street rout deepens selloff across Asia tech

US stock futures slide after Netflix guidance disappoints, chips fall further Investing.com -- Chinese artificial intelligence and semiconductor shares extended losses on Friday as a sharp overnight selloff in U.S. technology stocks rippled across Asian markets, prompting investors to take profits in some of the region’s biggest AI winners despite little change in their long-term growth outlook. The weakness was broad-based across mainland China and Hong Kong, with investors rotating out of high-valuation technology names after another volatile Wall Street session battered chipmakers, memory stocks and AI-linked companies. AI chip designer Cambricon Technologies Corp Ltd (SS:688256) fell more than 6%, while Foxconn Industrial Internet Co Ltd (SS:601138) lost over 5%.

Semiconductor names including SMIC, NAURA Technology and Luxshare Precision also declined, reflecting broad selling across China’s AI hardware supply chain. Hong Kong technology heavyweights also came under pressure. Meituan (HK:3690) and Kuaishou Technology (HK:1024) slid around 6%, while Alibaba, Tencent Holdings, Baidu and Xiaomi all traded lower, dragging the Hang Seng Tech Index sharply into the red.

The selling followed a sharp retreat in U.S. technology stocks overnight after investors dumped many of this year’s best-performing AI beneficiaries. Memory makers Sandisk, Western Digital and Seagate each lost more than 9%, while Intel and Micron dropped about 6%, extending a broader rotation away from high-multiple AI stocks. IBM also suffered one of its biggest-ever single-day declines after warning that customers were redirecting spending toward AI infrastructure, while recently listed SpaceX continued retreating from its post-IPO highs as enthusiasm for AI-linked growth companies cooled.

The pullback also reflected a broader unwinding of momentum trades rather than company-specific concerns. Investors remain cautious over elevated AI valuations, questions surrounding returns on massive data-centre spending and increasing competition from Chinese large-language model developers, even as long-term demand for AI infrastructure remains intact. At the same time, renewed geopolitical tensions in the Middle East have added another layer of uncertainty for risk assets.

For China, Bank of America described the country as an important long-term AI challenger, highlighting its rapid AI adoption, low data costs and expanding domestic ecosystem. However, the bank said execution, continued investment and the ability to convert widespread AI use into sustainable productivity gains would determine how much of that potential is ultimately realised.