Fresh fears over the stretched valuations of artificial intelligence companies and the semiconductor manufacturers that underpin them triggered a global sell-off in technology stocks.
The pullback was triggered by a report from the Bank of America, which expects the Federal Reserve to raise interest rates three times this year to counter rising inflation in the US.
The sell-off began on the Asia-Pacific markets, where South Korea’s Kospi, the year’s best-performing global market, shed 10 per cent, led by double-digit drops in shares of Samsung Electronics and SK Hynix, the memory-chipmakers whose customers include Nvidia, Apple and Microsoft.
The rout continued in Europe, where ASML, the Continent’s most valuable company and a global semiconductor manufacturer, closed down 5.7 per cent in Amsterdam. Raspberry Pi, the mini-computer maker and one of the few London-listed tech businesses, lost 14 per cent. The technology-focused FTSE 100 investment trusts Polar Capital and Scottish Mortgage Investment Trust closed down 1.6 per cent and 3.3 per cent respectively.
On Wall Street, billions of dollars were wiped from the biggest AI-focused stocks at the opening bell, and although some of the losses were pared, Nvidia, the chipmaker, was still marked down 4.1 per cent; Sandisk, a chip manufacturer, shed 13.6 per cent; and Micron Technology, the memory-chipmaker that reports third-quarter results today, was off 12.9 per cent.
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