AI hardware stocks declined once again this morning, according to data. As of press time, Yangtze Optical Fibre and Cable Joint Stock Limited Company (YOFC) (06869) fell 4.25% to HK$106; Hua Hong Grace Semiconductor Limited (HUA HONG GRACE) (01347) dropped 3.61% to HK$64.15; Zhongji Innolight Co.,Ltd. (ZJ INNOLIGHT) (03308) slipped 3.25% to HK$700.5; and Lenovo Group Ltd. (LENOVO GROUP) (00992) shed 3.37% to HK$22.38.
On the news front, the U.S. AI supply chain suffered a broad selloff overnight, with the Philadelphia Semiconductor Index plunging 6.72% in a single day, and memory and optical communications names bearing the brunt of the damage. The trigger was Meta's future spending commitments soaring to an astonishing $825 billion, with its five-year CDS quote hitting a record high, prompting the market to reassess the return prospects and funding pressure of massive AI investment.
It is worth noting that debt insurance prices for major technology companies such as Oracle, Microsoft, and Amazon have also come under varying degrees of pressure. Among new cloud providers, in mid-October this year, Coreweave's five-year CDS touched 1,194 basis points, implying a default probability exceeding 60%, while its unsecured high-yield bond yield rose to 16.2%, having fallen into junk territory.
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