AI Investment Surge Shakes Tech Stocks Amid Global Market Uncertainty

Asian stocks faced turbulence due to rising AI investment costs affecting the tech sector. Despite Alphabet's solid earnings, their increased capital expenditure caused tech stocks to fluctuate. Meanwhile, chip providers like Nvidia showed gains. Market focus shifts to Amazon's results and upcoming central bank meetings.

Asian stocks faltered as fears over soaring AI investment costs cast a shadow on the tech sector, despite a bounceback attempt from Wall Street futures driven by gains among chip providers.

Following Alphabet's solid earnings, its announcement of capital expenditure ranging from $175 billion to $185 billion this year surprised analysts, causing share prices to fluctuate. The tech sector grapples with shifts as investors pivot to cyclical stocks amid concerns over AI's potential job disruptions. Newly introduced legal tools from Anthropic's large language model contributed to a massive selloff, erasing $830 billion in market value since late January.

Mixed performance continued with Advanced Micro Devices posting disappointing earnings, resulting in a 17% slump. Chip giant Nvidia, however, rebounded by nearly 2%, helping lift Nasdaq and S&P 500 futures. Asian markets remained jittery: South Korea's KOSPI fell 1.7% and Hong Kong's Hang Seng shed 0.8%. As attention turns to Amazon's earnings and central bank policy meetings, market sentiment remains on edge.

(With inputs from agencies.)