SpaceX slump fails to dent Hong Kong tech as investors seen pivoting
Heavyweights such as Alibaba gain as analysts bet on business models of locally listed tech companies that differ from US counterparts
A sharp pullback in US space-technology giant SpaceX and renewed valuation pressure on Wall Street’s tech heavyweights are unlikely to trigger a major sell-off in Hong Kong equities, according to analysts, who note that local tech firms operate under distinct business models and lack the stretched valuations of their overseas peers.
“I don’t think there will be much impact” in Hong Kong, said Kenny Tang Sing-hing, chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators.
He explained that the business models of Hong Kong-listed tech companies – largely built around consumer internet platforms, software services and e-commerce ecosystems – differed fundamentally from their US counterparts.
The slump, combined with recent valuation corrections across the US’ “magnificent seven” technology giants – Nvidia, Alphabet, Apple, Microsoft, Amazon, Meta and Tesla – has prompted investors to reassess whether massive capital expenditure in artificial intelligence hardware can yield commensurate revenue during earnings season.
However, some market observers said that the fallout for Hong Kong technology stocks would remain minimal, adding that the global pullback may even benefit local equities by triggering a pivot towards practical software applications.
Tommy Ong, managing director of T.O. & Associates Consultancy, said that Hong Kong equities were inherently insulated from a drawdown in AI hardware because the local market did not participate in the original run-up.