China Tech Shares Slide Despite Explosive Chip Sales Growth

WHO:

Bloomberg Markets - Chinese technology hardware companies saw their shares fall; some companies reported strong quarterly results.

CNBC - The STAR 50 Index tracks 50 of the largest and most liquid companies on Shanghai’s technology-focused STAR Market, including semiconductor, artificial intelligence and other high-tech firms.

CNBC - CATL, a battery company described as a Chinese technology success story, came under pressure.

CNBC - Benjamin Cavender of China Market Research Group said the sell-off began with valuation correction and profit-taking, and investors are now scrutinizing whether earnings justify AI-related optimism.

CNBC - DeepSeek’s emergence fueled optimism that Chinese companies could challenge U.S. counterparts in artificial intelligence.

WHAT:

Bloomberg Markets - Chinese technology hardware shares tumbled even as some companies posted eye-popping quarterly results; chipmaker sales surged 1,800%.

CNBC - The STAR 50 Index fell more than 40% from its July peak.

CNBC - CATL shares fell 37% since the start of the year.

CNBC - Investors questioned whether China’s AI boom could generate profits sufficient to support lofty valuations.

CNBC - Cavender said: “I think the sell-off primarily started as a valuation correction and some profit taking, but now there is a critical look happening at whether earnings can justify the AI excitement.”

WHERE:

CNBC - The STAR 50 Index covers companies listed on Shanghai’s STAR Market.

CNBC - A factory of Beidou Intelligent Connected Vehicle Technology Co. (BICV) is in the High Tech Industrial Development Zone in Suqian, Jiangsu Province, China.

WHY:

Bloomberg Markets - Persistent concerns about fundamentals and weak global AI sentiment outweighed strong quarterly results.

CNBC - The sell-off broadened from profit-taking after a strong rally into scrutiny of whether earnings can support current valuations and whether heavy AI investment can turn into profits.

CNBC - Investor optimism had risen after DeepSeek emerged, but subsequently faded as investors questioned the speed and profitability of AI investments.

HOW:

CNBC - The STAR 50 Index measures the performance of 50 of the largest and most liquid companies on Shanghai’s technology-focused STAR Market.

CNBC - The article’s factory caption describes workers manufacturing smart automotive central control navigation products at BICV.

(UPDATED October 29, 2026 13:06 UTC)

Chinese technology shares have tumbled despite some companies posting strong quarterly results, including a chipmaker whose sales surged 1,800%. Shanghai’s STAR 50 Index, which tracks 50 major technology firms, has fallen more than 40% from its July peak, while CATL shares are down 37% since the start of the year. After DeepSeek sparked hopes that Chinese firms could challenge U.S. rivals in AI, investors have shifted from profit-taking to questioning whether earnings can justify high valuations and heavy AI investment.