Asian stocks extended losses on Friday as concerns over artificial intelligence (AI) valuations deepened following a weaker-than-expected forecast from chipmaker Broadcom, while ongoing uncertainty in the Middle East added to investor caution.
Technology-heavy markets in Asia came under pressure after Broadcom’s third-quarter revenue guidance missed market expectations, triggering a sell-off in US technology shares overnight. The decline spilled into regional markets, with South Korean stocks falling sharply and Japan’s benchmark index retreating more than 1%.
The weakness reflects growing concerns that the strong rally in AI-related stocks may have outpaced underlying fundamentals after months of heavy investment and soaring valuations.
According to market analysts, Broadcom’s outlook prompted profit-taking across the semiconductor sector and encouraged investors to rotate into other areas of the market. City Index analyst Fiona Cincotta said the company’s results suggested investor expectations may have moved ahead of business fundamentals.
Investor sentiment was also weighed down by geopolitical developments in the Middle East. Efforts to secure a lasting ceasefire between Israel and Lebanon appeared fragile after Naim Qassem rejected a conditional truce, while talks between the US and Iran showed little sign of progress despite optimism expressed by Donald Trump.
Elsewhere, investors continued to monitor plans by Elon Musk’s SpaceX to launch what could become the largest initial public offering in history, with the company seeking to raise US$75 billion at a valuation of around US$1.8 trillion.
Markets in Hong Kong, Sydney, Singapore and Taipei also closed lower, while Shanghai, Wellington and Manila posted modest gains. Indonesia’s market extended declines amid concerns over economic conditions and pressure on the rupiah from higher oil prices.
