Stock Crash: Has the AI ​​bubble burst? ₹4.2 lakh crore lost in just a few hours, what will be the impact on India?

News Topical, Digital Desk : Asian stock markets witnessed a major shakeup on Wednesday, particularly for companies involved in artificial intelligence (AI). Shares of Japanese tech giant SoftBank plunged 14%, wiping away nearly $32 billion in market capitalization. This is the second consecutive day of setbacks for the company, with a total loss of $50 billion (approximately Rs 4.2 lakh crore in Indian rupees) in two days. 

If this decline persists, it will be the company's worst day since August 2024, when its shares fell 18%. SoftBank has a vast AI ecosystem, encompassing significant investments in infrastructure, chips, and application-level companies. The company's portfolio includes companies like OpenAI, Ampere Computing, OpusClip, and Tempus AI. SoftBank also holds a controlling stake in Britain's Arm Holdings, a chip design company for mobile and AI processors. Nasdaq-listed Arm Holdings shares also fell 4.7% overnight, dealing a double blow to SoftBank. Market experts say investors  are now fearing an AI valuation bubble . Shares of US company Palantir fell 8%, even though its results were better than expected. Nevertheless, concerns about high valuations have shaken the overall AI theme. Giants like Nvidia, AMD, Amazon, and Oracle also slipped. Other Japanese tech companies, such as Advantest (down 8%), Renesas Electronics (down 5.5%), and Tokyo Electron (down more than 5%), also fell. South Korea's Samsung Electronics and SK Hynix, which had played a major role in pushing the Kospi index to record highs this year, also fell by up to 6%. Taiwan's TSMC fell 2%, while China's Alibaba and Tencent fell 3% and 2%, respectively. The recent boom in the AI ​​sector has pushed the S&P 500's forward P/E ratio above 23—the same level as during the dot-com bubble of 2000. 

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