A significant sell-off in technology shares drove Asian stock markets sharply lower Friday, as investors questioned recent valuations.
Trading on South Korea's Kospi was halted after an 8% plunge, closing down 5.8%. The move followed a sharp drop in Apple shares after the company announced price increases for iPads and MacBooks, citing soaring chip costs.
The sell-off also reflects growing investor scrutiny of the hundreds of billions of dollars being invested this year by major tech firms in artificial intelligence infrastructure.
"The long-term investment case for AI remains compelling, but investors are becoming far more selective about which companies can justify the valuations," said David Makaryan, senior partner at Alpha Pacific Group.
The rout was broad-based. Japan's Nikkei 225 fell over 4% as technology investor SoftBank slumped 12.5%. Major indexes in Taiwan and mainland China also dropped sharply.
In the U.S. on Thursday, Apple shares fell 6% after its announcement. Microsoft also declined after citing higher component costs for its Xbox price increases.
Analysts warn that the high cost of commercializing AI is being passed to consumers. "That naturally raises questions about how quickly demand for such tools will match the investment, and whether tech valuations are realistic," said Raymond Woo of Kyoto University Innovation Capital.