According to Business Insider, Asian tech stocks got hammered Wednesday with Japan’s Nikkei 225 Index sliding 4.7% and South Korea’s Kospi dropping as much as 6.2%. Chip test provider Adventest plunged 11% while Samsung Electronics and SK Hynix sank 8.2% and 9.5% respectively. Taiwan Semiconductor Manufacturing Company fell 3% and Hong Kong’s Hang Seng Tech Index dropped 2.9%. The selloff erased much of the Kospi’s 20% October surge and followed similar declines on Wall Street where the Nasdaq 100 fell 2.1%. Adding fuel to the fire was Michael Burry’s disclosure of short bets against Palantir and Nvidia, with Palantir tumbling 8% despite solid earnings.
Sponsored content — provided for informational and promotional purposes.
The AI reality check hits hard
Here’s the thing about market sentiment – it can turn on a dime. For months, investors have been throwing money at anything with “AI” in the description, sending valuations to absolutely insane levels. But now people are starting to ask the tough questions. Can these companies actually deliver on their promises? Are we looking at another tech bubble situation?
Look at the numbers – Palantir is still up 152% year to date even after this drop. Nvidia’s still sitting pretty with 48% gains. When stocks run that hot, any negative catalyst can trigger massive profit-taking. And Michael Burry’s short bets provided exactly that catalyst. It’s like everyone was waiting for someone to say “the emperor has no clothes” before hitting the sell button.
When chip stocks fall, everything follows
What’s really concerning is how this selloff started with the semiconductor companies. These aren’t speculative startups – we’re talking about TSMC, Samsung, SK Hynix. These are the foundational companies that actually build the hardware that makes AI possible. When they’re getting hit this hard, it suggests investors are questioning the entire AI infrastructure thesis.
Louis Navellier nailed it when he said if an AI correction comes, “it will sweep the rest of the market with it due to the heavyweight of the leading names.” Basically, tech has become such a huge part of major indexes that when these giants stumble, they drag everything down with them. It’s not just about AI companies anymore – it’s about market stability.
Now we play the waiting game
The real test comes November 19th when Nvidia reports earnings. Chris Weston from Pepperstone pointed out there aren’t many reasons to buy until we get closer to that date. Nvidia has become the bellwether for the entire AI sector – if they deliver strong numbers and guidance, this might just be a healthy correction. If they disappoint? Well, let’s just say this selloff could look like a minor blip.
But here’s what I find interesting – despite all the fear, analysts like Navellier are still recommending Nvidia and Palantir. The fundamental AI story hasn’t really changed. The technology is still transformative. The question is whether stock prices got ahead of the actual business results. And honestly, when you see companies like Palantir still up 152% in a year, it’s hard to argue they didn’t.
Maybe this is just normal market behavior
Let’s keep some perspective though. As Navellier noted, we were at all-time highs just last week. Profit-taking after such a massive run is completely normal market behavior. The problem is that after years of “buy the dip” mentality working perfectly, any significant pullback feels apocalyptic.
The truth is probably somewhere in the middle. AI isn’t going away – the technology is real and transformative. But not every company claiming AI capabilities will actually benefit. And valuations absolutely got stretched. So is this the beginning of the end for AI stocks? Probably not. But it might be the end of the beginning where investors start being more selective about which AI plays actually have sustainable business models.
