According to Zhitong Finance APP, AI hardware stocks including PCB and optical communication names declined broadly. As of press time, KINWONG (ASX: 03228) fell 11.29% to HK$56.95; YOFC (ASX: 06869) dropped 9.45% to HK$101.6; GIGADEVICE (ASX: 03986) declined 6.50% to HK$325.2; and ZJ INNOLIGHT (ASX: 03308) slipped 4.04% to HK$724.
On the news front, recent market concerns over AI companies' investment returns and financing sustainability have triggered a significant correction in AI hardware stocks. As the current earnings season enters a period of performance verification, the alignment between valuations and earnings is facing reassessment.
Notably, Elon Musk recently predicted that over the past few weeks, debt markets have almost completely cut off funding channels, and any company without independent large-scale revenue outside of AI data centers is practically unable to secure financing. This means more than 200 new cloud service providers will face death and consolidation in a "big fish eat small fish" manner.
Morgan Stanley data shows that in September, the average weekly trading volume of CDS linked to bonds of Oracle, SpaceX, Alphabet, Amazon, Meta, Broadcom, and Nvidia exceeded US$9 billion, compared to less than US$2 billion in July.
Nomura believes that the AI investment narrative is facing an inherent contradiction in its own logic. The market's judgment on the capital expenditure path of hyperscale cloud computing providers has evolved from the previous "win no matter what" to the current "lesser of two evils" dilemma.
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