Wall Street's fears about artificial intelligence disrupting businesses are proving beneficial for Asian equities, driving demand for leading chip manufacturers that dominate the industry's supply chain. Since the start of 2026, the MSCI Asia Pacific Index has surged more than 12%, contrasting with declines in U.S. benchmarks. U.S. stocks recently faced selling pressure due to concerns that AI models could threaten software, legal, and real estate service providers. Year-to-date, the S&P 500 has fallen 0.2%, while the tech-heavy Nasdaq 100 has dropped roughly 2%. This divergence highlights a shift in global capital preferences—away from AI pioneers burdened by massive spending and toward hardware producers with strong pricing power, many of which are based in Asia. Soaring memory chip prices have boosted regional heavyweights like Samsung Electronics, while the irreplaceable position of Taiwan Semiconductor Manufacturing as the world’s leading contract chipmaker has supported Taiwan’s stock market. Since the disruptive emergence of AI, Asian equities have outperformed U.S. markets. Richard Tang, Head of Research at Pictet Hong Kong, noted, "The primary concern in the U.S. is the capital expenditure by hyperscale companies. Much of Asia’s tech exposure lies upstream. Regardless of who ultimately wins, upstream players will continue to generate revenue from downstream participants." Asia hosts a large number of advanced chipmakers, semiconductor foundries, and assemblers critical to AI infrastructure, a key reason for the region’s resilience during recent Wall Street declines. Recent remarks by Micron Technology about tight memory chip supply, along with NVIDIA’s comments on sustainable spending, have reinforced this perception. As a sign of growing foreign demand, Samsung Electronics recorded its largest overseas buying volume on Thursday, pushing its shares up 6.4%. Meanwhile, weekly purchases of Taiwanese stocks hit the third-highest level on record during a holiday-shortened trading week for global investors. Over the past 10 sessions, the Nasdaq 100 fell 4.6%, erasing more than $15 billion in market value, as software stocks and others perceived as vulnerable to new AI tools were sold off. Stephanie Aliaga, Global Market Strategist at J.P. Morgan Asset Management, said in an interview, "Some of the panic in the U.S. is good news for Asia, especially when considering what infrastructure is actually needed to leverage 'Agentic AI.' The market is really starting to price in the 'ChatGPT moment' for AI agents." The heavy weighting of major Asian chipmakers in local stock indices further amplifies their impact on broader market movements. Taiwan Semiconductor Manufacturing alone accounts for nearly 45% of the Taiwan Weighted Index, triple its level a decade ago. South Korea’s Kospi Index is nearly a duopoly, with Samsung Electronics and SK Hynix together making up close to 40% of the index. While so-called "AI panic trading" has also hit U.S. real estate services firms and insurance brokers, Asia has suffered less damage because some local companies have been slower to adopt cutting-edge technology. Since February 3, Topix’s insurance sub-index has risen 6.2%, while its real estate sub-index has surged 15%. Andrew Jackson, Japanese Equity Strategist at Ortus Advisors, commented, "So far, the traditionalists are winning. This has shielded them from AI disruption-led selling, as these industries are more entrenched in Japan and currently less open to disruption." Data show that the correlation between Asian and U.S. stock markets, based on weekly returns, has fallen to 0.43, the lowest level since June 2022. To be sure, Asia is not entirely immune to global turbulence. Although they represent a smaller portion of regional markets, Indian IT services firms like Infosys Ltd. have declined alongside U.S. peers in recent sell-offs. For now, however, Asian equities are expected to continue outperforming, thanks to local companies’ distinct roles in the AI ecosystem, cheaper valuations, and stronger earnings growth. Elfreda Jonker, Client Portfolio Manager at Alphinity Investment Management, stated, "We are investing in AI enablers like chipmakers. One of our largest holdings is Taiwan Semiconductor Manufacturing, and we remain as bullish as ever. All AI roads lead to TSMC."
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