The AI Bull Market Hits the Brakes as Funds Flow Back to "Old Economy" Stocks, with Xiaomi Stock Soaring 46% in a Single Month

BlockBeats News, July 29th. The current AI hardware bull market experienced a "hard brake" amidst loud voices. Over the past month, leading sectors such as storage, chips, and semiconductor equipment collectively retraced. The market expressed concerns about the ROI of AI capital expenditure, overvaluation, and intensified competition in the Chinese supply chain. Funds began to flow towards Hong Kong-listed platform leaders and undervalued "old economy stocks." Looking at the performance over the past month, key AI stocks experienced significant declines:

· SK Hynix in South Korea (down 53% in 34 days)

· SanDisk in the US (down approximately 47%)

· Intel in the US (down approximately 34%)

· Samsung Electronics in South Korea (down approximately 32%)

· Micron Technology in the US (down approximately 28%)

Meanwhile, some "old economy stocks" in the Hong Kong market continued to strengthen, with funds flowing back into assets of Tencent, Meituan, Xiaomi, Alibaba, JD.com, among others, where:

· Xiaomi Group (up approximately 46%)

· Meituan (up approximately 36%)

· JD.com (up approximately 28%)

· Alibaba (up approximately 22%)

· Tencent Holdings (up approximately 11%)

According to public data from the South Korean Exchange, as of mid-July, foreign investors had net sold 12.1 trillion Korean won on the KOSPI main board and 338.1 billion Korean won on the KOSDAQ. In contrast, southbound funds in the Hong Kong market continued to return. Morgan Stanley's statistics show that from July 16th to 22nd, southbound funds net flowed into Hong Kong stocks by $1.6 billion. Since July, a total net inflow of $11.1 billion has been recorded, with a year-to-date net inflow reaching $46.6 billion. After the crowded trading in the AI hardware chain subsided, funds are moving out of South Korean semiconductor high-beta assets and shifting towards Hong Kong internet leaders, dividend assets, and undervalued core stocks.

Market insiders believe that with AI trading entering a period of deleveraging and revaluation, funds now prefer assets with a clear path to profitability and room for valuation adjustment. In the short term, Hong Kong's internet leaders, dividend assets, and traditional core stocks are absorbing some of the returning risk appetite.