Reuters: "In China, the AI bubble has already burst"

I'm not sure that's how I would phrase it, the index in question is down 40% but it still trades around 40 100 times earnings.

From Reuters, October 25 and 27:

• Mainland's AI-heavy STAR50 index down 40% from July high
• Collapse could scuttle tech fundraising, new listings
• Valuations still lofty vs US, pointing to further losses

While global tech stocks teeter, in China they have already crashed as lofty valuations collapse under worries about AI demand and curbs on Chinese exports.

 

The meltdown, tanking the mainland STAR50 index of AI and semiconductor leaders ​by 40% in less than four months and vaporising some $480 billion in market value, is an ill omen for wobbly world markets and a dampener on China's efforts ‌at encouraging its savers into stocks to fund the AI boom.

 

It has also slammed the brakes on a rally running two years, since economic stimulus promises sent shares soaring, and has stalled Beijing's push to break with a long boom-bust pattern and drive a "slow bull" market that delivers reliable performance. China's broad blue-chip index

has dropped about 20% from highs made in June.

 

"The stock market later evolved into a speculative crazy bull," said Beijing-based fund manager Dong Baozhen. "And now we see ​the bubble bursting."

 

The reversal reflects a rally that ran to higher heights than markets in the West or elsewhere in Asia, and compares with a mere prick to US AI stocks, which ​have led a 6% drawdown in the Nasdaq from a record high scaled three weeks ago.

 

There has been no obvious selling trigger in China, although ⁠traders said high prices, tax bills and the threat of the US or other nations banning Chinese equipment in data centres all contributed.

 

With AI stocks running to 42% of China's market capitalisation and 57% of ​turnover across mainland-listed A-shares and Hong Kong's H-shares, according to Goldman Sachs, few in a market dominated by small investors have escaped pain.

RETAIL FAVOURITES SLIDE

Shares in robot-maker Unitree...

....MUCH MORE 

 

If memory serves the Nasdaq-100 P/E got over 100 in 1999 but I haven't looked it up.

And the Star 50 is down another 3.79% today, off -48.61 to 1,234.33 CNY.