Asian chipmakers and AI-focused equities posted strong gains on Friday, mirroring an overnight uplift on Wall Street after encouraging earnings from some of the largest U.S. technology firms. Investors also engaged in month-end rebalancing, which added buying pressure into stocks that had been severely marked down during July.
South Korea illustrated the pattern clearly. The KOSPI surged by more than 18% on Friday, yet the index remained more than 20% lower for the month. Two of the index's largest constituents, Samsung Electronics and SK Hynix, climbed between 25% and 30% on the day, erasing a large portion of their July declines. Even with Friday's rally, Samsung remained about 21% down for July, while SK Hynix was still on track for a roughly 35% drop over the month.
Japan also saw significant technology-driven gains. The Nikkei 225 rose roughly 4% on Friday, though it continued to trade around 8.1% below its level at the start of July. Technology names led the advance, with conglomerate Softbank Group jumping nearly 14%, Tokyo Electron up about 6.2%, and test and measurement supplier Advantest surging some 15%.
Taiwan and contract chipmakers attracted buying as well. Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, climbed about 10% on Friday. Hon Hai Precision Industry, a major electronics assembler, advanced 9.2%.
China's AI-related stocks were swept into the rally. Z.AI increased around 15.5% and Minimax rose roughly 13% after the latter released a new, advanced AI model on Friday.
Market participants in Asia were drawing confidence from an upbeat session on Wall Street, where Microsoft and Amazon delivered results that helped lift sentiment toward the AI trade. Microsoft chose not to raise its capital expenditures guidance for the year, which relieved some worries about unsustainably high AI-related spending. Amazon posted strong June-quarter results, showing improving returns on its cloud and AI investments.
Those positive surprises helped markets look beyond less robust reports from Apple and other major U.S. tech groups. Coupled with month-end bargain hunting, the earnings eased some of the selling pressure that had built up through July.
Still, the broader backdrop that weighed on technology shares earlier in the month - investor concerns over elevated valuations tied to AI spending and the impact of higher U.S. interest rates - left many stocks with steep cumulative losses for July despite Friday's rebound.
Bottom line - Friday's session offered a notable recovery for chip and AI stocks across Asia, supported by select positive U.S. tech earnings and portfolio rebalancing at month-end. However, the moves did not erase the deeper monthly declines many names experienced through July.