A sharp pullback in US space-technology giant SpaceX and renewed valuation pressure on Wall Street’s tech heavyweights are unlikely to trigger a major sell-off in Hong Kong equities, according to analysts, who note that local tech firms operate under distinct business models and lack the stretched valuations of their overseas peers.
“I don’t think there will be much impact” in Hong Kong, said Kenny Tang Sing-hing, chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators.
He explained that the business models of Hong Kong-listed tech companies – which are largely built around consumer internet platforms, software services, and e-commerce ecosystems – differ fundamentally from their US counterparts.
His comments came with SpaceX, which staged the largest initial public offering in history in June, having slumped below its US$135 debut price, erasing more than US$1 trillion from its peak market value as of Friday. The stock closed at US$119.85 on Monday, extending its losing streak to a seventh consecutive session.
The slump, combined with recent valuation corrections across the US’ “magnificent seven” technology giants – Nvidia, Alphabet, Apple, Microsoft, Amazon, Meta and Tesla – has prompted investors to reassess whether massive capital expenditure in artificial intelligence hardware can yield commensurate revenue during earnings season.
However, some market experts said that the fallout for Hong Kong technology stocks would remain minimal, and that the global pullback may even benefit local equities by triggering a pivot towards practical software applications.