AI scares US stocks, Asian stock markets "benefit from misfortune," chip stocks race ahead as the biggest winners

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Concerns in the US market about potential "disruption" brought by AI, are driving global capital from Wall Street's potential victims toward Asia's AI infrastructure winners, with chip manufacturing stocks becoming the most direct beneficiaries.

According to Bloomberg, the MSCI Asia Pacific Index has risen over 12% since 2026, while the S&P 500 has dropped 0.2% this year, and the Nasdaq 100 has fallen by about 2%. Over the past ten trading days, the Nasdaq 100 has slumped 4.6%, evaporating about $1.5 trillion in market value, with software stocks and other sectors perceived as vulnerable to new AI tools leading the decline.

Capital flows are also rapidly reflecting this divergence. On Thursday, Samsung saw the "largest-scale" overseas net buy, with its share price soaring 6.4%, continuing upward on Friday; global investors recorded the third largest single-week net buy in Taiwan stocks. Japan’s memory chip maker Kioxia Holdings surged 15% on Friday.

The core of the market bet lies in the fact that global capital is shifting from "cash-burning" AI pioneers to hardware and upstream supply chains with pricing power, and Asia occupies a key position in advanced chip manufacturing, foundry, and assembly.

Micron’s latest comments on tightening memory chip supply, along with Nvidia’s remarks on the sustainability of spending, further reinforce this allocation logic. Citing multiple institutional voices, Bloomberg says as the market begins to price in the "ChatGPT moment of AI agents", infrastructure demand may be realized first in Asian assets.

Capital exits the "AI disruption trade", simultaneous US market pressure and Asian benefit

The trigger for this round of US stock volatility, is investor concern that AI models will threaten the business models of some software, legal, and real estate service providers, resulting in sell-offs of related stocks. Bloomberg says this "AI scare trade" has also affected US real estate service and insurance broker stocks.

In contrast, Asian markets’ technology exposure is mostly concentrated upstream. Richard Tang, Hong Kong Research Director at BOCOM International, said: "The US is mainly worried about the spending problems of super-sized enterprises. Most of Asia's tech exposure is upstream. No matter who ultimately wins, upstream will still earn revenues from downstream participants."

Rising memory chip prices strengthen the positive outlook for the hardware side, benefiting regional leaders like Samsung. TSMC, as the world’s leading contract chip manufacturer, its "irreplaceability" also supports the Taiwan stock market.

Micron Technology’s latest comments on tight memory chip supply and Nvidia’s remarks on the sustainability of spending are interpreted by the market as supporting the hardware cycle and capital expenditure expectations.

Foreign capital increases exposure to Korea, Taiwan, and Japan, index weighting amplifies the driving effect of chip stocks

Against the backdrop of new capital inflow, the high weighting of major chip stocks in local Asian indices amplifies their driving force on market performance.

Bloomberg data shows TSMC’s weighting in the Taiwan Weighted Index Taiex is close to 45%, three times that of ten years ago; Korea’s Kospi is also close to a "dual oligopoly", with Samsung and SK Hynix together comprising nearly 40%.

On the capital side, Samsung recorded the largest overseas net buy on Thursday, pushing its share price sharply higher, while Taiwan’s market saw the third largest single-week net buy by global investors. Kioxia, spurred by AI demand, raised its earnings forecast and saw its share price soar, further strengthening a market pricing of "upstream realization first".

Not entirely immune—software stocks still dragged down, but market consensus leans toward "continued outperformance"

Bloomberg points out Asian software companies will still feel pressure from sentiment transmission—for example, Hong Kong-listed Kingdee Software and Indian IT services firm Infosys Ltd. both declined in the recent sell-off alongside similar US assets. But their share of the regional market is limited.

JP Morgan global market strategist Stephanie Aliaga told Bloomberg TV some of the US’s "scares" are actually good news for Asia—especially when contemplating "what infrastructure is really needed to harness agentic AI", as the market starts to price in the "ChatGPT moment of AI agents".

Alphinity Investment Management client portfolio manager Elfreda Jonker told Bloomberg she currently prefers to invest in chip manufacturers, one key holding being TSMC: "All roads to AI lead to TSMC."

Bloomberg reports with different corporate structures, cheaper valuations, and stronger profit growth, it is expected Asian stock markets will continue to outperform.

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