Asian stocks slump on rising AI investment costs

MSCI’s broadest index of Asia-Pacific shares outside Japan tumbled 1.7%

Asian stocks slumped on Thursday as concerns about the rising costs of AI investment encouraged a rotation out of tech, while a renewed decline in silver squeezed leveraged positions that were already down.

MSCI’s broadest index of Asia-Pacific shares outside Japan tumbled 1.7%, weighed by a 3.6% plunge in KOSPI. Taiwanese shares shed 1.1% but financials and real estate outperformed.

Nikkei slid 0.7%, while healthcare, real estate and utilities were all up.

That increase in Alphabet capex was absolutely enormous, said Tony Sycamore, analyst at IG.

At a time when everyone is hyper-sensitive and hyper-nervous about what’s going on with the software companies, with what’s going on with CAPEX and AI valuations. I would have thought the reaction would be quite negative, he added.

Bitcoin prices also tumbled 1.8% to $71,404, the lowest level since November 2024.

Precious metals also dipped on Thursday to snap two days of gains after an epic implosion last week saw them slumping from record highs.

Silver dropped 15% to $74.6 an ounce, just a touch above the recent low of $71.32. Gold also declined 1.8% to $4,863 an ounce.

The risk sensitive Australian dollar dropped 0.4% to $0.6969, while the Kiwi also slid 0.3% to $0.5984.

Meanwhile, U.S. stock futures attempted a recovery early in Asia but that quicky lost momentum. Both Nasdaq futures and S&P 500 were down 0.1%, while Europe’s EURO STOXX 50 futures slid 0.3%.

Much attention is on Amazon’s results later in the day, as well as policy meetings from the Bank of England and the European Central Bank where rates are expected to be on hold.