The tech-fueled rally that has dominated global markets is showing clear signs of cracking. Asian stock markets took a nosedive on Friday, with South Korea’s Kospi index forced into a circuit-breaker halt for the third time this week after an 8% plunge. This isn't just a minor dip; it is a sharp reality check for a market that has been riding high on hype.
The sell-off was fueled by growing anxiety over the hundreds of billions of dollars tech giants are pouring into artificial intelligence infrastructure—spending that investors are now questioning. As the costs of essential components like computer chips soar, companies are being forced to pass those burdens onto consumers.
Apple, for instance, saw its shares crater by 6% in the U.S. after announcing price hikes for iPads and MacBooks, while Microsoft is raising prices on Xbox consoles. These moves have sparked fears that rising costs will inevitably stifle demand for hardware, creating a domino effect that threatens the entire tech ecosystem.
While some analysts still cling to the long-term potential of AI, the market is finally demanding proof that these companies can actually justify their astronomical valuations. In Japan, the Nikkei 225 closed down more than 4%, dragged down by a 12.5% collapse in SoftBank shares.
From Taiwan to mainland China, the message from traders is clear: the era of blind optimism is ending, and the era of accountability has begun.
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