Investors dumped technology stocks on Bursa Malaysia today on fears the Democrats’ resounding win in the US midterm elections would increase regulatory scrutiny of artificial intelligence (AI) and slow the data centre build-out.
Tech stocks on regional markets also dropped sharply in tandem with the bloodbath in US markets overnight, leading to their worst performance in 18 months.
The Nasdaq fell 5.5% or 1,421 points, wiping out about US$2.5 trillion for a record daily loss in market capitalisation for the tech-heavy index, while the Dow Jones fell 3.4% or 1,833 points.
Wall Street’s volatility “fear gauge” soared, with investors worried the Democrats will apply the brakes to the AI boom. The political jitters are hitting an AI trade already on shaky footing due to worry about return on massive spending in AI-related infrastructure.
The Bursa Malaysia Technology Index fell as much as 6.4%, making it the worst-performing sectoral index. It pared its losses to close 4.6% lower at 67.88 points.
Among the biggest losers was automation equipment manufacturer Pentamaster Corp Bhd, which fell as much as 10.3% or 53 sen to RM4.62 before paring its losses to close 5.1% lower at RM4.89. This values the Penang-based company at RM3.48 billion.
Inari Amertron Bhd dropped as much as 8.8% or 20 sen to RM2.08 before edging up to close 6.6% lower at RM2.13, with 82.7 million shares traded. At this price, the outsourced semiconductor assembly and test (OSAT) services company is valued at RM8.25 billion.
Another OSAT player, Malaysian Pacific Industries Bhd, fell as much as 8% to RM35.80. It regained some ground to close 7.1% lower at RM36.14, valuing it at RM7.59 billion.
Semiconductor equipment maker ViTrox Corp Bhd fell nearly 7% or 72 sen to RM9.88 before closing at RM10.22, valuing the group at RM19.36 billion.
It was bad timing for the Penang-based company as the sharp drop comes after posting its best quarter since its listing in 2005.
In its filing yesterday, ViTrox announced its third quarter net profit surged 242% to RM118.6 million from RM34.7 million a year ago, while revenue more than doubled to RM485.1 million for the quarter ended Sept 30, 2026.
Frontken Corp Bhd tumbled as much as 37 sen, or more than 7%, to RM4.49 before recovering to close 3.1% lower at RM4.71, valuing it at RM8.58 billion.
Meanwhile, research houses like Apex Securities and BIMB Securities note the sharp drop in the tech stocks appear largely sentiment- and valuation-driven rather than a structural collapse in AI demand, though near-term volatility and project deployment delays remain key risks.
Regulatory and infrastructure delays affecting data centre power and land availability by 2028 may trigger a sharp valuation reset for tech stocks, noted another analyst.
