Trillion losses and declining confidence.. What is happening in technology stocks?
Technology stocks in Asia and Europe continued their sharp decline, today, Monday, with investor confidence in global companies related to artificial intelligence declining, after the US Nasdaq index, which includes major technology companies, fell by more than 4.5% last week.
And the shares of my company closed "Samsung Electronics" and"SK Hynix"the two giants of the memory chip industry, which are included in the South Korean Kospi index, fell in Monday’s trading session with a decline of 10.18% and 7.68%, respectively. The KOSPI index fell by up to 8%, as the two companies constitute more than 40% of the index’s weight.
Shares of Taiwan Semiconductor Manufacturing Company (TSMC) fell by 2.96%, while shares of Hon Hai Precision, also known as Foxconn, fell by 5.27%.
Shares of Japanese technology investment group SoftBank fell by 6.1%, while shares of Tokyo Electron fell by 6.1%. and Advantest by 7.45% and 5.72%, respectively.
This decline was exacerbated as a result of investors’ aversion to risk amid expectations that interest rates in the United States would continue to rise for a longer period, after the release of US labor market data last week, which greatly exceeded expectations.
The bank said "Goldman Sachs" In a note on Friday: "We postpone the last two rate cuts in our Fed forecast to June and December 2027. The labor market has performed stronger than we expected".
This decline in stock prices comes after a recent recovery in shares of Asian technology companies, supported by investor optimism about the demand for artificial intelligence. Last month, the market value of Samsung Electronics and SK Hynix exceeded $1 trillion, while SoftBank recently became Japan’s most valuable company.
The sharp decline in technology stocks began after Broadcom’s revenues for the second quarter of the fiscal year fell short of market expectations last week, leading to a sharp decline in its shares and widespread repercussions for the technology sector.
According to a note issued by UOB Bank on Monday, "The collapse, led by technology companies, wiped out approximately 1.8 trillion of the market capitalization of the Standard & Poor’s 500 Index.
However, UOB Bank indicated that technology and software companies will remain in focus as "The space exploration, artificial intelligence and technology company listed on the Nasdaq on Friday (June 12), in what may be the largest IPO ever.".
Broader Asian markets also witnessed a decline on Monday, after a new escalation in the Iranian war indicates that the conflict is not over yet.
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