Asian AI and Semiconductor Stocks Retreat After Broadcom Earnings
Asian semiconductor and artificial intelligence-related stocks moved lower on Thursday, following a sharp decline in Broadcom shares after the company released mixed quarterly results and guidance.
The pullback was particularly noticeable in Japan and South Korea, where AI-linked stocks had recently posted strong gains amid growing enthusiasm surrounding artificial intelligence and data center infrastructure.
Japanese Technology Stocks Lead Regional Losses
Japanese technology shares experienced some of the largest declines in the region.
SoftBank Group dropped more than 10%, while AI data center supplier Ibiden fell 8.4%. Other companies tied to the AI supply chain also came under pressure, with Socionext declining 6.7% and Taiyo Yuden losing 3.2%.
The weakness reflected broader investor concerns about valuations after a strong rally across the sector in recent months.
South Korean Chipmakers Face Selling Pressure
South Korea’s major semiconductor companies also traded lower as investors reduced exposure to AI-related names.
Samsung Electronics and SK Hynix fell between 2% and 4%, while LG Electronics suffered one of the steepest declines in the region, tumbling nearly 14%.
The losses highlight how sensitive AI and semiconductor stocks remain to earnings results from major industry players.
Taiwan’s AI Supply Chain Also Declines
Taiwanese technology stocks joined the regional selloff.
Hon Hai Precision, better known as Foxconn, declined nearly 4%, while AI server manufacturer Wistron dropped 8%.
Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, slipped 0.8%. However, losses were limited after CEO C.C. Wei expressed confidence that demand driven by artificial intelligence will remain strong over the long term.
Broadcom Earnings Trigger Profit-Taking
The decline across Asian technology stocks followed a sharp 12% drop in Broadcom shares after the U.S. market close.
Although the company reported earnings that slightly exceeded analyst expectations, revenue came in below forecasts. Investors were also disappointed after Broadcom maintained its AI chip revenue outlook at $16 billion for the current quarter, below market expectations of approximately $16.36 billion.
While Broadcom’s core business remains healthy, the results failed to justify the stock’s recent rally, leading many investors to lock in profits.
Weakness Spreads Across Global Chip Stocks
The negative sentiment extended beyond Asia, affecting several major U.S. semiconductor companies during after-hours trading.
Industry leaders such as Intel and AMD also moved lower as investors reassessed growth expectations for the semiconductor sector.
The reaction illustrates how closely connected global chipmakers have become as artificial intelligence continues to drive investment decisions across the technology industry.
AI Sector Remains Strong Despite Short-Term Pullback
Despite Thursday’s declines, AI and semiconductor stocks remain among the strongest-performing sectors of 2026.
The group recorded substantial gains throughout May as investors increased exposure to companies benefiting from the rapid expansion of artificial intelligence technologies.
However, the sector’s strong performance has also made it vulnerable to short-term profit-taking, particularly as broader market sentiment has been affected by ongoing geopolitical tensions in the Middle East and increasing uncertainty across global financial markets.
