（Singapore, 15.12.2025）Asian stock markets started the final full trading week of 2025 on a cautious note, with technology stocks once again under pressure as doubts grow over the sustainability of massive spending on artificial intelligence. The pullback reflects a broader shift in global sentiment, as investors begin to question whether the AI boom that has powered markets to record highs can continue into next year.
A regional equity index tracking Asian shares fell about 0.7%, with South Korea leading losses at around 1.5%. The country, often seen as a key beneficiary of the AI supply chain due to its semiconductor and electronics industries, was hit hard after a technology-led selloff on Wall Street late last week. While US equity futures edged slightly higher on Monday, suggesting some stabilization, the mood in Asia remained fragile.
Chinese stocks also slipped after fresh economic data highlighted ongoing weakness in consumer demand. Retail sales growth slowed sharply in November, rising just 1.3% from a year earlier — well below expectations and the weakest pace since the pandemic era. Adding to unease, reports of a roughly $3 billion redemption crisis in eastern China have revived worries about risks in the shadow-banking sector, particularly as the property downturn drags on.
Across global markets, confidence has been fading around technology stocks, especially those tied closely to artificial intelligence. For much of the past three years, AI has been the dominant investment theme, driving enormous gains in shares of chipmakers, cloud-computing firms, and big technology platforms. But cracks are beginning to show.
Recent declines in the shares of Nvidia and Oracle have become symbols of the growing skepticism. Oracle’s stock dropped sharply after the company reported much higher-than-expected capital spending related to AI infrastructure, alongside slower growth in cloud revenue. The news triggered broader concerns about whether companies can justify the scale of their investments, particularly when profits are under pressure.
Market analysts say Asian equities may be especially exposed if the AI trade cools further. Many Asian economies rely heavily on manufacturing components used in data centers, chips, and electronics that support AI systems. If global demand slows or spending plans are scaled back, the region could feel the impact quickly.
Some investors now openly discuss the possibility that the AI boom may be approaching a turning point. While enthusiasm around the technology itself remains strong, the focus has shifted toward practical questions: how long companies can keep spending at current levels, when profits will catch up, and whether customers are ultimately willing to pay enough for AI-powered services.
On Wall Street, the debate has intensified. Over the past three years, a $30 trillion rally in US equities has been driven largely by a handful of major technology companies and firms supplying AI infrastructure. The concern now is not necessarily falling earnings, but the risk that growth simply stops accelerating — a scenario that could be enough to trigger a correction.
Big Tech’s spending plans are at the center of this discussion. Companies such as Alphabet, Microsoft, Amazon, and Meta are expected to invest more than $400 billion over the next year, mostly on data centers and related infrastructure. While AI-related revenue is growing, it still lags far behind the scale of these investments. Rising depreciation costs from new facilities are also starting to weigh on profits and cash flow, potentially limiting buybacks and dividends.
Meanwhile, some companies are relying heavily on debt to fund their expansion. Oracle, for example, has raised tens of billions of dollars through bond sales to finance data center construction. That strategy increases financial pressure, as debt holders must be paid on schedule regardless of business conditions. Credit markets have taken notice, with measures of Oracle’s credit risk rising to their highest levels since the global financial crisis.
Still, not everyone believes the situation resembles past bubbles. While comparisons to the dot-com era are common, today’s valuations are far lower. Major technology firms remain highly profitable, and their stock prices, while elevated, are nowhere near the extremes seen in the early 2000s. Some investors argue that current levels reflect “rational exuberance” rather than runaway speculation.
Precious metals have benefited from the uncertain backdrop. Gold rose for a fifth straight session, extending a powerful rally that has seen prices jump more than 60% this year. Silver has performed even better, more than doubling in 2025. Mixed messages from US Federal Reserve officials have prompted traders to reduce expectations for aggressive interest-rate cuts next year, supporting demand for safe-haven assets.
Bond markets were relatively calm, even as policymakers debated the future path of rates. Some Fed officials signaled a preference for keeping policy restrictive to control inflation, while others suggested more room for easing in 2026. This uncertainty has kept investors cautious across asset classes.
Looking ahead, markets face a busy week with several major central bank meetings, including decisions from the Bank of England and the Bank of Japan. For now, however, the spotlight remains firmly on technology and AI.
The key question for investors heading into 2026 is whether artificial intelligence will deliver the returns needed to justify years of heavy spending — or whether the sector is due for a period of adjustment. While few expect a dramatic collapse, many believe the era of easy gains may be coming to an end, setting the stage for greater volatility and rotation across global markets.
