Tech Stocks Surge in Asia; Experts Warn ‘Cooling AI Boom May Hit NVIDIA’s Gains Hard’

Asian stock markets started the week on a strong note, buoyed by tech sector gains as anticipation builds around key economic decisions in China and Japan. Despite the positive momentum, analysts caution that the ongoing cooling of the artificial intelligence (AI) frenzy could dampen earnings for major players like NVIDIA Corporation.

China’s Economic Stimulus Fails to Impress Investors

China’s Shanghai Composite and Shenzhen Component indices struggled to keep pace with regional gains, fluctuating between slight losses and flat performance. Market participants are closely watching the People’s Bank of China’s (PBoC) upcoming decision on the Loan Prime Rate (LPR), set to be announced later this week. Economists widely predict the central bank will maintain rates, following an October cut.

Investor sentiment toward China remains lukewarm as recent economic stimuli from Beijing have failed to make a noticeable impact. October inflation data revealed disinflationary pressures persist, leaving markets uncertain about the country’s near-term economic recovery. Additionally, key speeches by top Chinese officials at a Hong Kong conference are expected to provide further insight into potential policy measures.

Hong Kong’s Hang Seng Index edged higher, gaining 0.4% thanks to strength in technology stocks. However, Xiaomi Corp weighed on the broader market with a 2% drop after reporting losses in its electric vehicle division despite improving overall earnings.

Japanese Tech Stocks Propel Nikkei Higher

Japan’s Nikkei 225 and Topix indices both rose by 0.4%, bolstered by gains in tech shares and the yen’s continued weakness, which provided support to export-driven sectors. Investors are bracing for Japan’s October Consumer Price Index (CPI) data, due Friday, which could offer clues about the country’s economic trajectory. Last week’s disappointing GDP data, showing a sharp slowdown in third-quarter growth, heightened concerns about the nation’s recovery momentum.

Broader Asian Markets Follow Tech Rally

South Korea’s KOSPI index mirrored the regional optimism, rising 0.2%, driven by strong performances from local tech stocks. Meanwhile, Australia’s ASX 200 outperformed its peers with a 1.1% surge, fueled by robust gains in mining and energy sectors, as commodity prices rallied globally.

India’s Nifty 50 futures indicated a positive start to the day, offering some relief after steep corrections pushed the benchmark into a 10% slump from recent record highs. Indian markets are looking for stability after weeks of volatility.

NVIDIA Earnings Under Spotlight Amid AI Market Concerns

The rally in Asian tech stocks was partly inspired by Wall Street’s overnight gains, with U.S. futures holding steady during Asian trading hours. All eyes are now on NVIDIA’s earnings report this week, which could set the tone for the future of the AI boom. With concerns mounting over cooling interest in AI-driven stocks, analysts have questioned whether the company’s valuation can sustain further growth. NVIDIA’s performance will serve as a bellwether for investor confidence in the sector.