China’s tech hardware shares slide as valuation worries mount

China’s tech hardware rally is having a rough autumn. On October 9, 2026, the STAR 50 Index dropped as much as 4.6%, extending a selloff that pushed its two-day decline past 9%. That marks the steepest slide since July. The stocks taking the most damage are tied to artificial intelligence and semiconductors, which were this year’s favorite trade. The worry is simple. Investors are questioning whether global AI demand and spending can keep up with the prices they paid for these companies. A rally that ran ahead of itself To understand the fall, start with the climb. From April to July 2026, China’s tech sector gained more than 70%. Then the momentum broke. By late June, the STAR 50 and ChiNext had both hit their peaks, and over the third quarter each fell around 30% from those highs. By late September, after third-quarter earnings came in, the sector had recorded its worst quarterly performance on record. Some of the year’s biggest AI names fared worse than the indexes. Biwin Storage Technology and Moore Threads Technology each dropped at least 40% in the quarter ending September 2026. Why the selling picked up again this week Several pressures are landing at once. Investors have be...