Global Technology Markets Remain Divided as Microsoft Rebounds but Asian Chip Shares Struggle

NEW YORK — Global technology markets remained volatile on Thursday as strong earnings from Microsoft helped US shares recover, while South Korean chip stocks continued to struggle after a sharp AI-linked sell-off.

The S&P 500 rose in early American trading, while the technology-heavy Nasdaq recorded a stronger gain. Microsoft shares climbed after the company reported better-than-expected results supported by growth in its Azure cloud-computing division.

Meta moved in the opposite direction. Its shares fell after investors reacted to rising expenses and the cost of expanding artificial-intelligence infrastructure. The contrasting response illustrates that markets are no longer rewarding AI investment automatically; companies are increasingly expected to demonstrate that spending is producing revenue and profit.

In Asia, South Korea’s Kospi extended its decline, although Thursday’s fall was smaller than the severe losses experienced earlier in the week. Concerns have centred on high valuations, financing for large AI projects and stronger competition from Chinese semiconductor and technology companies.

Samsung Electronics and SK Hynix have benefited enormously from demand for high-bandwidth memory used in AI servers. South Korean semiconductor exports were reported to have risen sharply during the first part of July, demonstrating that underlying demand remains strong even while share prices decline.

The sell-off therefore does not show that artificial intelligence is disappearing from corporate investment plans. Instead, it reflects uncertainty about how much capacity companies should build, how quickly users will pay for new services and whether profits will justify current market valuations.

Technology shares are particularly vulnerable when expectations are very high. A company can announce record earnings and still experience a falling share price when investors had anticipated even stronger results or worry that capital spending will reduce future cash flow.

The divergence between Microsoft and Meta also shows that the market is differentiating between business models. Cloud-service revenue provided Microsoft with visible evidence of demand, while Meta’s spending plans raised questions about the timing and scale of future returns.

For pension funds and individual investors, the current period is a reminder that the adoption of a technology and the valuation of companies associated with it are separate matters. AI use may continue expanding even if the share prices of chipmakers, data-centre operators or software companies experience a substantial correction.