Investors Nervously Await Nvidia Earnings as Asian Selloff Intensifies

It’s been a brutal day of trading in Asia Tuesday, with stocks sinking to their lowest levels in a month. The heaviest selling came in tech-dependent markets, previously Asia’s best performers this year.

Investors are clearly jittery heading into Nvidia  (NVDA)  earnings on Wednesday, and they’ve been selling semiconductor plays ahead of those numbers. Markets are poised to punish anything other than the dramatic outperformance we’ve come to expect from the world’s most-valuable company.

The S&P Pan Asia Broad Market Index (BMI) fell 2.4% for Tuesday, taking Asian markets to their lowest close since October 14.

Recent Records Forgotten

The Kospi in South Korea has been the top performer in 2025, up by two-thirds (or 64.8% to be precise). But losses in its largest two components, with chipmakers Samsung Electronics (KR:005930) down 2.8% and SK Hynix (KR:000660) down 5.9%, sent it to a 3.3% drop on Tuesday.

In the three trading days since Thursday’s close, Korean stocks are down 5.3%.

Stocks in Japan, a far larger and broader market, sold off almost as hard. The market-wide Topix fell 2.9%, and the blue-chip, exporter-heavy Nikkei 225 almost matched the decline in Seoul with a 3.2% fall.

Venture-capital tech investor SoftBank Group (SFTBY) (T:9984) plunged 7.5% Tuesday. Having set all-time highs in late October, it has since dropped 30.5% in November alone.

Remarkably, that means SoftBank has still doubled for the year so far (up 103.8%), but the stock still has not found its bottom. I discussed last week that SoftBank has sold its Nvidia holding, but says it is doing so only so it can invest further into Artificial Intelligence (AI).

Japan’s leading chipmaker Tokyo Electron (TOELY) (T:8035), the standard bearer for Tokyo’s tech-hardware sector, saw a 5.5% drop Tuesday, and has fallen 7.2% since Thursday’s close.

The Nikkei has dropped 4.9% in the last three trading days. The Topix, protected by its greater skew toward domestic consumption, fell 3.7%.

Stocks in Japan, South Korea and Taiwan have all set recent all-time highs, and are all experiencing a short-term correction.

Taiwan’s market dropped 2.5% Tuesday, for a three-day loss of 4.3%. Taiwan Semiconductor Manufacturing Co.  (TSM) , Asia’s largest company by market value, explains the change, down 2.8% Tuesday and 4.1% since Thursday’s close.

What’s Next?

The billion-dollar question is, “Where do we go from here?”

“Buy on the dip” has been a rewarding strategy for most of this year. But the past three days feel different. They certainly demonstrate that the enthusiasm over AI is leading to stretched valuations, and a rising chorus of voices on Wall Street warning that stocks are poised for a significant correction.

We’ve seen the S&P 500 and Nasdaq close below their 50-day moving average, for instance. More Nasdaq stocks are now touching 52-week lows than are setting 52-week highs.

Will Nvidia’s earnings reassure investors that the AI theme supporting so many tech plays is still running strong? Or will middling numbers – likely exceeding forecasts but “not by enough” – prompt tech to continue to tumble?

It will also be important to watch Meta Platforms  (META) , which began correcting before its Magnificent Seven peers. It has sold off sharply since the end of October, down 19.9% since the close on October 29. It is still correcting, and a broader rally is unlikely until this bellwether turns.

Notably, those trends have little directly to do with Asia. But Asia’s tech plays are generally linked to the AI supply chain in some way or another. So the Nvidia uncertainty is playing into a broader semiconductor selloff.

Still a Strong Year So Far

Despite the pain of the last three trading days, it remains a very strong year for Asian stocks. The S&P Asia BMI is up 20.6%, handily outstripping the 13.7% advance in the S&P 500.

While the selling has been sharpest in East Asian tech for the last three days, markets are down Asia-wide, with the Hang Seng index in Hong Kong off 1.7% Tuesday for a loss of 4.2% since Thursday’s close.

Hong Kong is where international investors generally express their opinions on Chinese companies. The mainland markets, off-limits to the vast majority of international investors, remain somewhat insulated. But the CSI 300 index is still down 0.7% Tuesday, and 2.8% since Thursday’s close, taking them to their lowest finish since October 20.

TechOne Punished Down Under

Australian stocks fell 1.9% Tuesday, and are down 4.6% in November. Tuesday’s close is their lowest finish since early June. Aussie stocks face a “perfect storm” of factors, analyst Tony Sycamore tells the Australian Broadcasting Co., with hawkish noises on domestic interest rates from the central bank playing into the fear surrounding Nvidia’s prospects.

The U.S. government shutdown, while over, is also contributing to international uncertainty. The disrupted release schedule for U.S. economic data means investors are functioning with less information than normal, driving yields on safe-haven Japanese Government Bonds, for instance, to their highest levels since 1999.

TechnologyOne (ASX:TNE) today delivered record profits and sales with its latest earnings, but the enterprise software developer narrowly missed analyst expectations, cut its dividend – and was punished as a result. Its stock suffering a 17.2% savaging Tuesday, its biggest loss in two decades. That has pushed the stock into a loss for this year so far, down 4.4%.

Smartphone Maker Turns EV Profit

In Hong Kong, smartphone developer Xiaomi (XIACY) (HK:1810) notched Q3 sales that were up 22.3%. But most notably, it posted a profit from its new electric vehicle (EV) line for the first time, despite fierce competition that has led to a sharp decline in profitability for most major Chinese EV makers.

With profits up 80.9% year-on-year and beating expectations, Xiaomi shares sold off “only” 2.8% Tuesday. That makes for a three-day decline of 6.4%, but Xiaomi shares have been on the slide since late September.

They remain 19.9% higher for the year, but demonstrate dramatic volatility. The company has positioned itself at the intersection of AI, EV and tech hardware trends. EV market leader BYD (BYDDY) (HK:1211) has seen its shares descend since a peak in May, suffering a 14.2% fall in the last three trading days that renders them almost flat for the year, up just 2.5%.

In its core smartphone business, Xiaomi faces sharp competition from Apple  (AAPL)  in China, where the iPhone 17 has been selling very well. The Chinese company warns that smartphone prices may have to rise next year to offset higher chip costs. Suppliers such as Samsung have also been ramping up their AI chip production and focusing less on the lower-end chips typically used to power phones.

Investors in Asia will continue to hold their breath until Nvidia’s numbers come through. We can see from the plunge in TechOne shares that earnings disappointment is treated extremely harshly, and even outperformance like we landed from Xiaomi can’t overcome the broader market decline. 

At the time of publication, McMillan was long Nvidia, TSMC and BYD.