Asian tech stocks fall as AI spending fears grow

Asian technology stocks fell on Tuesday as investors grew more cautious about the cost and returns of artificial intelligence spending before major earnings releases.

South Korea's Kospi closed down 3.7% at 5,552.74. SK hynix fell 4.2% and Samsung lost 3%. In Tokyo, the Nikkei 225 closed down 1.3% at 64,075.52, with Kioxia down more than 4% and SoftBank down 6%.

Data-centre infrastructure firm Elice dropped more than 30% on its trading debut. Taiwan's TSMC also fell, although the Taiex edged higher.

Markets also declined in Hong Kong, Sydney, Singapore, Bangkok, Wellington and Manila. Jakarta rebounded more than 4% after falling nearly 15% over the previous two days, while Shanghai and Manila rose. London and Frankfurt were lower.

The selling came despite gains on Wall Street, where Amazon, Microsoft and Nvidia helped lift the Nasdaq. Bloomberg said the Philadelphia Semiconductor Index rose 1.6%, ending eight days of losses.

Investors are watching results from Meta and Tesla this week. Stephen Innes of SPI Asset Management said markets are focused not only on earnings but on how much companies still need to spend to support AI growth. Chris Weston of Pepperstone said investors need confidence that large AI infrastructure spending will generate returns above funding costs.

Oil prices rose amid concerns over Iranian attacks in the Strait of Hormuz. Around 0810 GMT, Brent crude was up 1.0% at $110.59 a barrel and West Texas Intermediate was up 1.1% at $104.80.