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Asian stocks got slammed this week as investors finally cooled off from the AI frenzy and scrambled to figure out what the hell central banks are planning. The rally that started the year didn’t last long, so traders who chased tech gains across Asia are now watching the floor fall out from under them. According to Bloomberg, last year’s market darling, the MSCI Asia Index, beat every major global benchmark by nearly five full points. That win streak just met a brick wall. Asia’s heavy reliance on the global AI supply chain means anything that hits Wall Street’s chip names hits Asia right after. And right now, nobody knows if the AI trade is just taking a break, or running out of gas for good. China ramps up local chip funding as Korea and Taiwan face heat in the Tech Wars AI stocks pushed Asia’s tech index to a record high last Friday. Now, investors are backing off. Everyone wanted a piece of the action last year. This year, they’re nervous. The problem is most of that rally sat on the backs of just a few firms, especially in Taiwan and South Korea. Some are still hopeful that Asia gives them better exposure to AI because of lower prices. But others are warning that too much depends on too few players. Ken Wong, who runs Asian equity portfolios at Eastspring in Hong Kong, said, “We’re calling more of an AI fatigue as opposed to a bubble.” He said if companies cut back spending or if profits start slipping, it’s game over for some of these stocks. While all that’s happening, China is going the other way by working on a massive $70 billion package to support the country’s chipmakers. Two big names (MetaX Integrated Circuits Shanghai and Moore Threads Technology)…

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Filed under: News - @ January 4, 2026 2:33 am