Chinese technology hardware shares set for worst quarterly performance as AI selloff deepens

China’s AI-adjacent tech stocks just posted a quarter that corporate PR teams will quietly pretend never happened. The STAR 50 Index, which tracks many of the country’s most prominent technology and semiconductor names, has fallen approximately 30% since the end of June, putting the sector on track for its worst quarterly performance in recent memory. The damage was concentrated in July, when a brutal selloff erased more than 28% of the index’s value. That came immediately after a nearly 75% rally over the prior three months, a whiplash sequence that transformed euphoria into something closer to existential dread for AI hardware investors. What triggered the crash The selloff wasn’t a uniquely Chinese phenomenon. Global chip stocks got hit simultaneously, with semiconductor indices in South Korea, Taiwan, and the US all sliding in sympathy. The common thread: investors started asking a very inconvenient question about whether the enormous capital being poured into AI infrastructure would actually generate proportional returns. The CSI 300 Index, China’s broader blue-chip benchmark, fell nearly 9-10% in July alone. That marked its worst monthly performance since January 2016, a peri...