Asia chips, AI stocks fall tracking Broadcom after mixed earnings
Investing.com– Asian chipmaking and artificial intelligence stocks fell on Thursday, tracking aftermarket declines in Broadcom after the chip designer posted middling quarterly earnings and guidance.
Japanese and South Korean shares were the biggest decliners, after logging strong gains in recent weeks on hype over AI.
Japan’s Softbank Group slid over 10%, while data center component maker Ibiden fell 8.4%. Socionext and Taiyo Yuden, which are also part of the AI data center supply chain, fell 6.7% and 3.2%, respectively.
In South Korea, top memory chip makers Samsung Electronics and SK Hynix fell between 2% and 4%, while LG Electronics tumbled nearly 14%.
Taiwan’s Hon Hai Precision fell nearly 4%, while Wistron Corp tumbled 8%. Both companies are key assemblers of AI servers.
TSMC, the world’s largest contract chipmaker, fell 0.8%. Bigger losses in the stock were limited by CEO C.C. Wei expressing confidence that AI-driven demand will remain robust in the coming years.
Losses in AI and chip stocks came tracking declines in Broadcom, which slid 12% after Wednesday’s U.S. market close.
While the company clocked slightly stronger-than-expected profit in its fiscal second quarter, its revenue missed expectations. Broadcom also maintained its current quarter AI chip revenue forecast unchanged at $16 billion, missing market expectations of $16.36 billion.
While the company’s core business remained strong, the mixed earnings and guidance opened the stock up to some profit-taking, especially after a strong run-up to its earnings.
These losses spilled over into broader chipmaking stocks, with major U.S.-listed chipmakers, including Intel and AMD, also falling in aftermarket trade.
Chip and AI-linked stocks marked stellar gains in May amid increasing optimism over the fast-growing technology. But this also left the sector vulnerable to profit-taking, especially as broader risk appetite soured in the face of continued tensions in the Middle East.
