China's AI Stock Bubble Bursts as STAR50 Index Plunges 40%

Chinese AI and semiconductor stocks have crashed, with the STAR50 index falling 40% in under four months and erasing about US$480 billion in market value, signaling a burst bubble amid concerns over AI demand and export curbs. The sell-off has ended a two-year rally and stalled Beijing's push for a "slow bull" market, with the broad blue-chip index down 20% from June highs. Retail favorites like robot-maker Unitree and chipmakers MetaX and Moore Threads have halved in value, while AI stocks now comprise 42% of China's market capitalization. The crash contrasts with a milder 6% Nasdaq drawdown, and analysts warn valuations remain high at 100 times trailing earnings versus the Nasdaq 100's 30. Some investors see buying opportunities, but many expect further declines as the market digests the speculative excess.