Indian companies linked to artificial intelligence infrastructure witnessed selling pressure on Tuesday, October 13, as a global decline in semiconductor and AI-related stocks affected investor sentiment across technology, power equipment and telecommunications infrastructure businesses.
According to a CNBC-TV18 report, shares of Hitachi Energy India and GE Vernova T&D India declined between 3.5% and 4% during trading, while CG Power and Siemens Energy India recorded losses ranging from 1.5% to 2.5%.
Optical fibre manufacturers Sterlite Technologies and HFCL also came under pressure, with their shares falling by as much as 5%. Both companies had recorded substantial gains earlier in the year amid expectations of increased demand for connectivity and data centre infrastructure.
The decline followed a broader sell-off in global semiconductor stocks, driven partly by concerns about intensifying competition from Chinese memory chip manufacturers.
China's ChangXin Memory Technologies (CXMT) recently reported progress in developing a memory chip architecture designed to increase data storage density. The development raised concerns about potential competition for established manufacturers, including South Korea's Samsung Electronics and SK Hynix.
Shares of SK Hynix fell approximately 10%, while Samsung Electronics declined 7.4% during Asian trading. Japan's Kioxia also recorded losses as selling pressure extended across memory chip manufacturers.
The downturn coincided with renewed concerns about the sustainability of investment in artificial intelligence infrastructure.
Broadcom Chief Executive Hock Tan's remarks questioning speculative investment behaviour in the AI sector added to investor concerns about valuations and expectations surrounding the technology.
The weakness subsequently extended to companies involved in power transmission, electrical equipment and optical fibre networks, sectors that have attracted investor attention because of their links to AI-related infrastructure expansion.
Data centres require substantial electricity supplies, power distribution systems and high-capacity communication networks to support AI computing operations.
Companies supplying these technologies have benefited from expectations of continued investment in computing facilities and digital infrastructure.
However, changes in sentiment towards global AI spending can also affect businesses that do not directly manufacture semiconductors or develop artificial intelligence models.
Other Indian companies with exposure to digital infrastructure also declined. E2E Networks, Anant Raj and Black Box were among the stocks affected by the broader weakness in AI-related investments.
The market movement reflects concerns over valuations and competitive pressures rather than a confirmed reduction in infrastructure spending by these companies.
While the emergence of additional semiconductor suppliers could influence global pricing and competition, its longer-term implications for AI infrastructure investment remain uncertain.
For Indian technology and infrastructure companies, investor attention is expected to remain on global semiconductor developments, corporate spending on AI computing and demand for data centre capacity.
The latest declines come as businesses worldwide continue to expand AI-related infrastructure, even as investors reassess the financial expectations associated with the sector.
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