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AI Angst in US Stocks Sends Global Money Chasing Asia’s Winners.
stock :: 12hrs ago :: source - bloomberg
By Winnie Hsu
(Bloomberg) -- Wall Street’s fears of business disruption caused by artificial intelligence are turning into a blessing for Asian stocks, fueling demand for the region’s leading chipmakers that dominate the industry’s supply chain.
The MSCI Asia Pacific Index has risen more than 12% in 2026, in contrast to losses in US benchmarks as shares were sold off on fears that AI models may threaten the business of software, legal and real estate service providers. The S&P 500 is down 0.2% for the year, while the technology-heavy Nasdaq 100 gauge has lost around 2%.
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The divergence underscores global funds’ shift of preference from AI pioneers burdened by massive spending toward hardware producers with strong pricing power, many of whom are in Asia. Surging memory chip prices have been a boon for the region’s heavyweights such as Samsung Electronics Co., while Taiwan Semiconductor Manufacturing Co.’s irreplaceable role as the world’s leading contract chipmaker has provided support for Taiwanese stocks.
“The main worry of the US is hyperscaler spending money,” said Richard Tang, head of research Hong Kong at Julius Baer. “Most of Asia’s tech exposure is upstream. Whoever wins in the end, upstream will still collect revenue from downstream players.”
The heavy presence in Asia of advanced chip manufacturers, semiconductor foundries and assemblers, which are crucial to the AI infrastructure, is a key reason behind the region’s resilience during the recent rout on Wall Street. Micron Technology Inc.’s latest comments on memory chip supply tightness and Nvidia Corp.’s on sustainable spending have reinforced such a perception.
In a sign of growing foreign demand, Samsung Electronics saw its biggest overseas buying Thursday, sending its shares up 6.4%. They rose again on Friday. Meanwhile, global investors also notched their third-largest weekly purchase in Taiwanese stocks in a holiday-shortened week.
Kioxia Holdings Corp.’s shares surged 15% on Friday after soaring AI demand helped the Japanese memory chipmaker deliver a better-than-anticipated results outlook.
That’s as the Nasdaq 100 Index fell 4.6% and shed about $1.5 trillion in market value over the past 10 sessions, hit by a selloff in software names and other stocks deemed at risk from new AI tools.
“Some of the scares in the US are also good news in Asia, particularly when thinking about what infrastructure is really needed to harness agentic AI,” Stephanie Aliaga, a global market strategist at JPMorgan Asset Management, said in a Bloomberg TV interview. “What markets are really beginning to price in is this ChatGPT moment for AI agents.”
Major Asian chipmakers’ outsize weighting in local equities markets further amplifies their impact on stock moves.
TSMC alone is approaching a weighting of 45% in the island’s benchmark Taiex index, three times its level a decade ago. South Korea’s Kospi has become a near duopoly, with Samsung Electronics and SK Hynix Inc. together making up nearly 40%.
While the so-called AI Scare Trade has also hurt US real estate services stocks and insurance brokers, there was less damage in Asia due to some of the local companies’ weaker response to cutting-edge technologies.
The Topix insurance sub-index has risen 6.2% since Feb. 3, with its real estate counterpart surging 15%.
“Old school wins the day so far,” said Andrew Jackson, head of Japan equity strategy at Ortus Advisors. “It’s protecting them from the AI disruption selloff because these industries are more entrenched in Japan and less open to disruption so far.”
As a result, the correlations between Asian and US equities based on weekly returns have slid to 0.43, the weakest level since June 2022, Bloomberg-compiled data show.
To be sure, Asia wasn’t entirely insulated from the global turmoil. Despite accounting for a small portion of the region’s stock markets, shares of software firms including Hong Kong-listed Kingdee International Software Group Co. and Indian tech services companies including Infosys Ltd. slumped along with their US peers during the recent sell-off.
But for now, Asian stocks are expected to continue their outperformance, thanks to the local companies’ different roles in the AI ecosystem, cheaper valuations and stronger earnings growth.
“What we are investing in are the AI enablers such as chip manufacturers,” said Elfreda Jonker, client portfolio manager at Alphinity Investment Management. “One of our big positions is TSMC, which we continue to like. All AI roads lead to TSMC.”
--With assistance from Masaki Kondo, Gabrielle Ng and Anthony Stephens.
(Updates with Kioxia earnings in 7th paragraph.)
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