Asian Markets Slip as Doubts Over the AI Boom Spread From Tech Stocks to Credit
Asian shares slipped on Monday as doubts grew over whether the AI investment boom is sustainable, Reuters reported. Japan’s Nikkei fell 0.5%, South Korea’s Kospi lost 0.8% and MSCI’s Asia-Pacific index excluding Japan eased 0.4%. The Kospi fell 16% last month, and the Nasdaq dropped almost 7% in October, its worst month since the April 2025 tariff selloff. US stock futures were higher.
Worries centre on negative cash flow and the scale of spending on AI. The cost of insuring against corporate defaults jumped last week, and chipmaker Intel plunged nearly 29% on Friday. Investors are watching Apple, AMD and Palantir, which report earnings this week.
Goldman Sachs expects capital spending by the largest cloud companies to nearly double to $800 billion this year and reach $1.2 trillion in 2027. Strategist Ben Snider wrote that “earnings growth is strong, but it is no longer accelerating.” The upcoming US midterm elections could also bring more hurdles for data centres if Democrats win either or both houses of Congress.
Source: reuters.com
