Key facts
- China's STAR 50 index has fallen 40% in under four months.
- Around $480 billion in market value has been lost.
- The STAR 50 index trades at 100 times trailing earnings, compared to the Nasdaq 100 at 30 times.
- Unitree robots stock halved since August debut.
- MetaX and Moore Threads GPU chip stocks lost half their value since July.
Chinese technology hardware firms are facing a critical earnings season following a significant selloff in sector stocks. The STAR 50 index, which tracks the largest AI and chip companies on Shanghai's STAR Market, has plummeted 40% in less than four months, erasing approximately $480 billion in market value. This downturn has led to stretched valuations, with the index still trading at 100 times trailing earnings, far above the Nasdaq 100's multiple of around 30 times. Several prominent companies, including Unitree, MetaX Integrated Circuits, and Moore Threads, have seen their market values significantly decline. Despite these pressures, major tech players like Alibaba, Tencent, and Baidu continue to invest heavily in AI, spending billions on chips and data centers, raising investor expectations for a return on investment.