Investors returned to AI-linked stocks on expectations that long-term demand for high-end memory and processors remains intact

Asian stock markets rebounded sharply on Tuesday, with South Korea and Japan leading gains amid a rally in AI-related shares, while investors awaited the Reserve Bank of Australia’s policy decision later in the day.

KOSPI index soared almost 5 per cent, with heavyweight chipmakers Samsung Electronics and SK Hynix climbing between 6.5 per cent and 8 per cent.

Investors returned to AI-linked stocks on expectations that long-term demand for high-end memory and processors remains intact.

Nikkei 225 index jumped more than 3 per cent, buoyed by a broad rally in chipmakers and technology shares, and helped by a softer yen.

Bucking the trend, Hang Seng index dropped more than 1 per cent.

In mainland China, the Shanghai Shenzhen CSI 300 index slid 0.4 per cent, while the Shanghai Composite traded flat.

S&P/ASX 200 jumped 1.1 per cent, while Straits Times Index rose almost 1 per cent.

Elsewhere, there was a firm finish on U.S. stock market overnight, with gains in technology and chipmaking stocks. Investors are awaiting key earnings this week, including from Amazon and Alphabet.

U.S. stock index futures edged higher during Asian hours on Tuesday.

Sentiment toward AI-related stocks has been volatile in recent sessions. Optimism around rapid adoption and strong long-term growth prospects had given way to sharp profit-taking after Microsoft’s results highlighted heavy capital spending requirements, raising questions about margins in the near term.

However, Tuesday’s rally suggested investors were willing to look past short-term headwinds, betting that demand for AI infrastructure will continue to support chipmakers and technology suppliers.