Asian Stocks Are Down 10% From June Highs. That Could Be Bad News for This Semiconductor Index.
The semiconductor-heavy MSCI Asia Pacific index has lost about 10% of its value since June 22. Is this a temporary dip or a long-term repricing for chip stocks?
Overview
Semiconductor stocks are going through a global sell-off. Investors have become worried that major artificial intelligence (AI) hyperscalers won't get enough out of the money they've spent on AI data centers and infrastructure. In case AI hyperscalers scale back on their AI capex, this would reduce sky-high demand for semiconductors and memory chips.
Some of these investor concerns about semiconductor stocks can be seen in Asian stock markets, where many of the world's leading semiconductor and memory chip companies are located. Asian stocks have benefited from the AI boom. But according to Bloomberg, the MSCI Asia Pacific index has declined by about 10% since its June 22 all-time high. More than 20% of this index consists of three major chip stocks from Taiwan and South Korea.
Details
Since June 22, shares of other leading semiconductor stocks around the globe have also dropped. Taiwan Semiconductor Manufacturing shares are down about 13.8%, Holland's ASML Holding has declined by about 14.4%, America's Nvidia is down about 6.4%, and the iShares MSCI South Korea ETF is down by 26.4%.
Source
Originally published at www.fool.com.