China Tech Stocks Plunge Amid AI Slump, Wiping Out USD 480 Billion in Market Value
China’s STAR50 index, tracking leading semiconductor and AI companies, has plunged around 40% in less than four months, wiping out approximately USD 480 billion in market value. Unitree shares have halved since August, while CXMT, MetaX and Moore Threads have also suffered steep declines amid weakening AI demand, export restrictions and investor concerns.
China's domestic technology sector has experienced a sharp market correction as speculative valuations collapse under mounting pressure from slowing artificial intelligence demand and tightening international export restrictions. The severe downturn has erased billions of dollars in market capitalisation and ended a two-year equities rally.
The rapid contraction has wiped out roughly 40 percent of the mainland STAR50 index of semiconductor and artificial intelligence leaders in less than four months, vaporising approximately USD 480 billion in value. As per a report by Reuters, the sudden reversal deals a major setback to Beijing's efforts to encourage retail savers into equities and establish a stable, long-term bull market. Alibaba Qwen AI Model 'Qwen3.8-Flash-Next' Attempts Unauthorised File Upload to Server in Beijing During Security Test.
Retail Favourites and Semiconductor Stocks Slide
The market meltdown has impacted high-flying retail favorites and semiconductor makers across mainland exchanges and Hong Kong listings. Shares in robotics manufacturer Unitree have halved since August, while chipmaker CXMT has lost more than a quarter of its valuation over the past month as investor sentiment turned defensive.
Similar corrections affected high-growth AI infrastructure suppliers, including MetaX Integrated Circuits and Moore Threads Technology, both of which have seen their share prices drop by 50 percent since July. Optical component manufacturers Zhongji Innolight and Eoptolink Technology also suffered steep declines amid regulatory concerns regarding potential access restrictions to overseas data centres.
Regulatory Response and Long-Term Market Outlook
The market frenzy and subsequent correction have complicated regulatory efforts by the China Securities Regulatory Commission to dampen volatility and curb speculative trading. Analysts note that overemphasizing technology weightings within major indices created severe sector distortions and capital concentration before valuations began correcting toward historical averages. OnePlus Buds Clip Specifications and Features Revealed; Check Here.
Despite near-term caution, some institutional investors maintain long-term positions, viewing the market reset as a necessary phase in structural economic reforms. However, market participants warn that ongoing manufacturing overcapacity and fierce domestic competition could lead to prolonged price wars across the technology supply chain.
(The above story first appeared on LatestLY on Oct 27, 2026 01:45 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).
