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Asian markets rallied Wednesday as tech firms enjoyed a much-needed rebound, with investors taking heart from upbeat earnings that lifted sentiment ahead of a crucial reporting season.
Seoul and Tokyo were the headliners again as chipmakers and other key players in the AI buildout boom chalked up healthy gains, following a torrid few weeks fuelled by concerns about profitability and debt financing.
South Korea’s SK hynix and Samsung both surged at least seven percent, while Kioxia, Advantest and SoftBank spiked between two and four percent in Japan — having all been pummelled since the start of last week.
The gains came after Elon Musk’s SpaceX reported its first quarterly profit as a public company, as deals to rent out computing power to AI firms sent revenue at its artificial intelligence unit soaring.
The firm’s $4.4 billion net profit for July-September was more than double what was expected and compared with a loss of $1.1 billion a year earlier. Revenue at the firm — which listed after a world-record IPO in June — jumped 161 percent to $14.6 billion.
Meanwhile, world’s richest man Musk said he would back a merger of SpaceX and Tesla, adding that the combination would be “a good idea”. Such a tie-up would be the biggest of all time.
Server-maker Super Micro Computer also provided a fillip to buying sentiment as it said preliminary quarterly earnings had come in better than forecast.
The developments soothed worries on trading floors about the outlook for the AI boom, which has seen companies pump hundreds of billions into R&D, software building data centres and other hardware in recent years.
It also bodes well ahead of reports from Magnificent Seven members Tesla and Meta later in the day.
“Clear earnings beats and constructive corporate updates are helping to ease some of the AI anxiety that has surfaced in recent sessions,” Tim Waterer of KCM Trade said.
“If (Meta and Tesla’s) reports deliver similarly strong results and guidance, it could go some way toward reigniting broader AI enthusiasm and giving the sector more sustained momentum.”
Seoul’s Kospi jumped more than four percent, with infrastructure firm Elice soaring around 30 percent, almost wiping out the colossal losses suffered on its trading debut Tuesday.
Tokyo added more than one percent, while Hong Kong, Singapore, Wellington, Manila and Jakarta were also up.
There were losses in Sydney, where data centre developer NEXTDC tanked more than 40 percent after slashing its outlook and renewing its capital expenditure programme.
