A punishing wave of selling washed over Asia’s technology sector on Friday, erasing billions in market value as investors reacted to a paradox that has rattled global trading floors: Nvidia, the engine of the artificial intelligence boom, posted a blockbuster earnings beat, and the market hated it.
The result was a sea of red across Asian exchanges, led by a stunning double-digit collapse in SoftBank Group, as traders priced in a harsher reality for the AI ecosystem.
The damage was most acute in Japan, where SoftBank plunged more than 10%. The drop carried a bitter irony for the Japanese conglomerate. SoftBank recently liquidated its direct stake in Nvidia—securing billions in profit—yet found itself unable to escape the gravitational pull of the chip giant’s sentiment. Investors punished SoftBank for its lingering exposure to the sector through its controlling stake in Arm Holdings, the British chip designer whose architecture underpins Nvidia’s processors, and its massive capital commitments to AI infrastructure projects like the $500 billion “Stargate” data center initiative.
Register for Tekedia Mini-MBA edition 19 (Feb 9 – May 2, 2026): big discounts for early bird.
Tekedia AI in Business Masterclass opens registrations.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register for Tekedia AI Lab: From Technical Design to Deployment (next edition begins Jan 24 2026).
The bleeding in Tokyo was indiscriminate. Tokyo Electron, a bellwether for chip manufacturing equipment, shed 6.6%, while Lasertec dropped 5.2%. Even Renesas Electronics, a smaller but critical supplier in the Nvidia chain, retreated 3%.
Supply Chain Contagion
The selloff rippled rapidly through the critical supply chains in Korea and Taiwan.
- SK Hynix plummeted nearly 10%. The South Korean titan is Nvidia’s primary supplier of High Bandwidth Memory (HBM), the “turbocharger” memory chips essential for AI accelerators.
- Samsung Electronics, currently playing catch-up in the HBM race, was not spared, falling over 5%.
- TSMC (Taiwan Semiconductor Manufacturing Company), the sole manufacturer of Nvidia’s cutting-edge GPUs, dropped over 4% in Taipei.
- Foxconn (Hon Hai Precision Industry), the builder of the server racks that house these AI brains, dipped 4.86%.
The Nvidia Paradox
The catalyst for the panic occurred thousands of miles away during Thursday’s U.S. trading session. Nvidia delivered what looked like a perfect scorecard: a beat on third-quarter earnings and revenue, coupled with a fourth-quarter sales forecast that exceeded Wall Street’s wildest estimates. CEO Jensen Huang even declared demand for the new Blackwell chips to be “off the charts.”
Yet, Nvidia shares fell over 3% in New York. The market’s reaction signaled a shift in psychology—investors are no longer satisfied with “great” results; they demand perfection. The selloff suggests that fears of valuation ceilings and “execution risk” are beginning to outweigh raw growth numbers.
Analysts argue this isn’t just about one company. The semiconductor slump is colliding with a broader risk-off environment.
“Nvidia was a victim of a combination of a Bitcoin selloff, the possibility of a delayed Fed rate cut, and generally tighter financial conditions,” said Billy Toh, regional head of retail research at CGS International Securities Singapore.
Speaking to CNBC, Toh pinpointed the psychological pivot point: “Add in the ongoing talk of an AI bubble, which triggers a broader risk-off rotation, and naturally Nvidia becomes one of the first pressure points.”
With Bitcoin retreating and the Federal Reserve’s minutes casting doubt on a December rate cut, liquidity is tightening just as the AI trade demands massive new capital outlays.