# Crisis of confidence over tech valuations spreads

By Susannah Streeter — 2026-07-17

Susannah Streeter, chief investment strategist at Wealth Club, said: “The crisis of confidence over heady tech valuations has intensified with a sell-off spreading across markets.

“This nervousness is combining with trepidation about the escalation of conflict in the Middle East as higher energy prices look set to bed in.

“Asian equities took another dive, with Japan’s Nikkei falling by almost six per cent and the Taiex in Taiwan tumbling by more than six per cent.

“Wall Street stocks also look set to open deep in the red. However, the tech-lite nature of London’s FTSE 100 is giving the index more resilience, with the index gaining ground after a stumbling start.

“Although it’s far from immune to jitters about global economic prospects, investors are still seeking out more stable prospects amid this bout of tech volatility.

“The mix of energy, defence, consumer staples, pharma and financial stocks can be more attractive prospects amid an upturn in geopolitical tensions, higher oil prices and high-tech uncertainty.

“The outsized might of chip stars on indices has been causing these waves of turbulence as sentiment has begun to sour after their breathtaking climbs upwards.

“Results from TSMC, Taiwan Semiconductor Manufacturing Company, appear to have triggered this latest sell-off, which has spread to other big names in the sector.

“Even though the world’s biggest contract chipmaker once again demonstrated that demand remains exceptionally strong, investors have become increasingly concerned about the sheer scale of spending by hyperscalers and the risks associated with deploying such vast sums into technology evolving at breakneck speed.

“The world’s biggest contract chipmaker reported a whopping 61 per cent year-on-year increase in second-quarter net profit, but also highlighted plans to invest US$100 billion in expanding advanced chip manufacturing capacity in the United States.

“While the huge scale of this commitment highlights management’s confidence that demand from customers such as Nvidia, AMD and Apple will remain strong for years to come, concerns are brewing about whether these assets will remain technologically competitive long enough to generate attractive returns to justify the spend.

“Given the rapid pace of innovation in AI chips and computing architecture, there is a risk that equipment could become outdated, forcing operators to replace it sooner than expected.

“With the infrastructure build-out phase taking longer than some anticipated and returns further off on the horizon, it’s prompting a rethink about how much investors are willing to pay for companies exposed to the AI supply chain.

“Investors are also increasingly wary about the prospects of another flashpoint emerging in the Middle East, which could further snarl up energy supplies.

“Tehran’s call on Houthi rebels to be on standby to close the Bab el-Mandeb Strait, the key Red Sea oil route, should the US attack Iranian infrastructure, adds yet another layer of geopolitical risk to an already fragile energy market.

“Brent crude, the benchmark, is oscillating around the $84-85 level, up around 12 per cent on the week and hovering at one-month highs.

“There remain expectations that some kind of deal will be reached, especially with the US inching closer to the mid-term elections, when gas prices will be a hot topic on the campaign trail.

“But it’s clear that what was intended by the Trump administration to be a decisive and successful short-term campaign has been anything but.

“The conflict has opened up a can of worms when it comes to the control of key waterways in the region, highlighting how easily strategic maritime chokepoints can become geopolitical leverage points, threatening global energy supplies, disrupting trade flows and fuelling volatility across commodity markets.”

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