Emerging-market stocks experienced their worst day in about three weeks on Thursday, with the MSCI benchmark index dropping 1.6%, driven by a slump in Asian technology shares. The information-technology subindex fell as much as 3% after Broadcom Inc. reported a quarterly forecast for artificial-intelligence semiconductor revenue that fell short of market expectations, according to livemint.com.
The disappointing outlook from Broadcom rattled investor confidence in the sustainability of the AI rally that had boosted emerging-market equities. Broadcom’s forecast indicated slower growth in AI-related semiconductor demand, which weighed on technology heavyweights across Asia. This triggered a broad selloff in emerging-market tech stocks, reversing recent gains and highlighting concerns about the pace of AI-driven market expansion.
The AI sector has been a key driver of emerging-market stock performance, with investors betting on strong demand for semiconductors powering AI applications. Broadcom’s revenue forecast shortfall signals potential challenges ahead for the AI semiconductor market, which could impact related technology stocks in emerging economies. This development underscores the sensitivity of emerging-market equities to shifts in global AI hardware demand and investor sentiment.
The MSCI emerging-market information-technology subindex’s 3% decline on Thursday marks the largest drop in recent weeks, reflecting the immediate market reaction to Broadcom’s forecast. The index’s performance will be closely watched in upcoming sessions to assess whether the AI sector can regain momentum amid evolving demand signals.