HK Stock Market Move | Optical communication concept stocks lead the decline; Intel and Broadcom CEOs issue warnings in unison, saying financing may become the biggest bottleneck for AI development.

Optical communication concept stocks led the decline. As of press time, Cig Shanghai (06166) fell 6.35% to HK$87; YOFC (06869) dropped 5.19% to HK$148; Zhongji Innolight (03308) declined 4.26% to HK$864.5; TRIGIANT (01300) fell 4.19% to HK$2.63. On the news front, Broadcom CEO Hock Tan said Monday at the DBS Bank Asia Future Forward Summit held in Singapore that the entire industry is stepping up infrastructure construction to support increasingly complex AI large models. Compared with semiconductor, memory chip, or power shortages, financing issues may become a bigger obstacle to AI expansion. Intel CEO Lip-Bu Tan also expressed concerns about financing issues, pointing out that the cost of capital is continuously rising, while the market is also questioning whether companies that invest heavily in AI will ultimately be able to obtain sufficient returns. Overnight, the U.S. optical communication sector plunged across the board. Morningstar analyst Martin Szumski said that relevant remarks by Broadcom Chief Executive Officer Hock Tan may have triggered Monday's stock price fluctuations. Szumski explained that optical communication companies' revenue is highly dependent on the capital expenditure committed by hyperscale cloud service providers. He added that Hock Tan's remarks may indicate that the market is beginning to see signs that hyperscale cloud service providers are no longer "continuously spending heavily at all costs."