$480 billion wiped out: China's AI stocks slump – robot maker Unitree halves too
The STAR50 index of China's leading AI and chip stocks has lost about 40 percent in under four months. One fund manager says the bubble is bursting.
Archive image · Photo: 钉钉 / Wikimedia Commons, CC BY-SA 4.0 (cropped and resized)
China's AI stock rally has collapsed. The STAR50 index, which groups the main AI and semiconductor stocks, has lost about 40 percent in under four months, according to a Reuters report, wiping out around $480 billion in market value. On Monday the index closed at 1,315.50 points, down 2.23 percent. By comparison, the Nasdaq is only about 6 percent below the record it set three weeks ago.
Former market darlings have been hit hardest. Shares of robot maker Unitree, whose August IPO was oversubscribed about 8,000 times, have roughly halved since. Memory-chip maker CXMT lost more than 25 percent in a month, while optical suppliers Zhongji Innolight and Eoptolink are about 60 percent below their peaks. The STAR50's price-to-earnings ratio has fallen from about 250 to around 100 – compared with roughly 30 for the Nasdaq 100.
Reasons cited include lofty valuations, taxes, tighter regulatory guidance on leveraged and high-frequency trading, and fears of US restrictions such as a ban on Chinese equipment in data centres; Reuters said there was no single trigger. According to Goldman Sachs, AI stocks account for 42 percent of market capitalisation and 57 percent of turnover on mainland Chinese and Hong Kong markets.