Asia’s technology stocks opened 2026 like they were chasing a boarding call, jumping about 6% early in the year, while the Nasdaq 100 managed around 2%.
That gap means that investors are rotating toward the part of the world that actually builds the hardware behind the AI boom.
Goldman Sachs is overweight Asia tech.
Citigroup says long term global investors are building positions because Asia sits right in the middle of the semiconductor supply chain, and because earnings still have room to surprise on the upside.
“This really comes down to a shift in where investors see the best risk-reward right now,” said Dilin Wu from Pepperstone.
Wu believes US tech is like a mature gold mine, already rich in value.
“Asian tech, on the other hand, is like an under-explored mine – still undervalued but fundamentally strong, ready to reward those who notice it.”
And the valuations back that up.
The MSCI Asia Pacific Information Technology Index is trading on about 16xforward earnings.
The Nasdaq 100 and the US semiconductor index are closer to 25x.
Earnings are doing the real talking
This rally is not being driven by vibes alone. Earnings are pulling their weight.
In South Korea and Taiwan, two markets packed with chip and hardware companies, earnings per share are expected to grow about 79% and 36% over the next 12 months.
Nasdaq companies, by comparison, are forecast to grow around 28%.
Samsung just posted preliminary operating profit that more than tripled to a record, helped by higher memory prices.
TSMC’s revenue has already beaten expectations, and investors are now waiting on its full earnings update this week.
Several brokers have raised their price targets since the start of the year, which is usually a way of saying, we might have been too conservative.
The share prices are already responding.
TSMC, Samsung, and SK Hynix are up between 8% and 16% this year. In Hong Kong, chipmaker Hua Hong is up more than 20%.
George Molina from Templeton says demand is coming from hedge funds, long only funds, and passive investors, especially in Korea and Hong Kong.
In Japan, he says investors who trimmed AI exposure late last year are now adding it back.
China is back in the AI conversation
Then there is China, which investors are slowly reintroducing into the AI story after a long period in the naughty corner.
Interest has picked up thanks to DeepSeek’s research, Kuaishou’s AI momentum, and Beijing’s push for tech self reliance.
Bloomberg Intelligence now expects earnings growth for China’s tech megacaps to overtake the Magnificent Seven in 2026 for the first time since 2022.
There is also a growing pipeline of AI companies lining up to list in Hong Kong and mainland China.
Just last week, two firms seen as challengers to global leaders like OpenAI made their market debuts.
“AI is a multi-year global growth driver, and North Asia’s technology ecosystem spanning hardware, software, and infrastructure positions the region at the forefront of this trend,” said Gary Tan from Allspring.
In other words, this is not a one quarter trade. It is a structural shift.
Risks are still on the table
None of this means the road is perfectly smooth.
A pullback in AI spending would hurt chip demand, and geopolitics is always a shadow hanging over Taiwan.
Big Tech is expected to lift capital spending by about 34% to roughly US$440 billion next year. If that number ever slips, markets will notice very quickly.
But right now, investors seem comfortable betting that AI demand is still climbing, and that Asia is where most of that demand turns into actual revenue.
Why all this means for investors
For investors, this is about where the real leverage to AI sits.
In the US, the story is platforms and cloud services.
In Asia, it is factories, memory, and production capacity that every AI model needs, no matter who writes the software.
And that is why, while some are still arguing about whether US tech has peaked, global capital is building exposure to the part of the market that sells the tools, not just the apps.
Because in every gold rush, the smartest money eventually remembers to buy the shovels, and right now, most of those shovels are coming out of Asia.
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This article is not financial advice. Always do your own research or speak with a licensed adviser before making investment decisions.
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