AI hardware shares opened broadly lower this morning. As of press time, Victory Giant Technology (02476) fell 15.00% to HK$115.60; Yangtze Optical Fibre and Cable (06869) dropped 8.65% to HK$92.45; Zhongji Innolight (03308) declined 7.15% to HK$656.00; and Cambridge Technology (06166) slid 6.93% to HK$61.15.
On the news front, the AI narrative suffered a major blow during the U.S. earnings season. Overnight, Google posted its largest single-day drop since going public, as its third-quarter revenue and adjusted earnings per share both missed expectations, with free cash flow turning negative at US$9.07 billion. Intel and Amazon continued the selloff after hours. Amazon's third-quarter revenue and EPS both fell short of expectations, while capital expenditure of US$77.26 billion exceeded forecasts and free cash flow was negative for a second consecutive quarter. Intel's fourth-quarter guidance came in far below expectations, sending its shares down more than 20% after hours. Market concerns over the imbalance between tech giants' AI spending and core business growth are being released in a concentrated manner.
Notably, several companies disclosed their third-quarter earnings after the bell yesterday, further widening the divergence within the AI computing power supply chain. Shengyi Electronics saw third-quarter net profit rise 37.10% year-on-year and 20% quarter-on-quarter. Eoptolink's Q3 net profit grew 61% year-on-year but fell 19% quarter-on-quarter. Victory Giant Technology's third-quarter net profit fell 52% year-on-year and 66% quarter-on-quarter. Zhang Yidong of Haitong International recently noted that global AI tech hardware stocks have fallen sharply since early July, with the narrative logic shifting from "pursuing capital expenditure, fearing missing out" to "pursuing returns, guarding against risk."
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