Asian shares fall as AI investment concerns weigh on markets

Summarised from 2 outlets · Updated 2 Nov, 01:31 · Archive

Asian markets have opened lower amid concerns about the scale of artificial intelligence capital expenditure.

Asian share markets have slipped as worries about the sustainability of the AI investment boom loom over the tech sector. Concerns about negative cash flow and the sheer scale of AI capital expenditure saw the cost of insuring against corporate defaults rise last week. Gold hit a one-year low amid reports that stressed investors were selling to raise money for margin calls, while the high price of oil limited the safe-haven appeal of sovereign bonds.

Japan's Nikkei fell 0.5 per cent on Monday, while South Korea lost 0.8 per cent, having shed 16 per cent in October. The market turmoil comes ahead of major tech earnings this week, with Apple, AMD and Palantir set to report following Intel's near 29 per cent tumble on Friday.

Analysts at Goldman Sachs expect capital expenditure by hyperscalers to almost double to $US800 billion this year and rise further to $US1.2 trillion in 2027. Ben Snider, Goldman's chief US equity strategist, wrote that 'earnings growth is strong, but it is no longer accelerating' and that 'the growth rate of AI capex is peaking'.

Asian shares fall as AI investment concerns weigh on markets — Image: Perth Now

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How it is being reported

Asia shares bend under AI stress; Apple earnings loomAsian markets have opened lower, amid concerns about the sheer scale of AI capex, while has gold hit a one-year low and oil prices slipped.Perth Now · 2 Nov, 00:54
Asia shares bend under AI stress; Apple earnings loomAsian markets have opened lower, amid concerns about the sheer scale of AI capex, while has gold hit a one-year low and oil prices slipped.The West Australian · 2 Nov, 00:54

In this story: Apple · AMD · Palantir · Intel · Goldman Sachs · Japan · South Korea · United States

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