AI Stocks Stumble as Market Rotates to Value, While UBS Sees Further Upside Ahead
SGX:^STI.SI:Straits Times Index
The Straits Times Index rebounded sharply, surging more than 60 points in a single session to close at 4,556.52 after spending over a month in consolidation. Optimism was supported by a positive long-term outlook from DBS Group Research, which highlighted Singapore’s economic growth, safe-haven appeal, and market reforms as key drivers.
SGX:D05.SI:DBS Group
DBS Group Research projected that the STI could potentially approach 10,000 by 2040, while offering a nearer-term forecast of around 4,880 by 2026 following a strong 2025, implying more than 300 points of upside from current levels.
US:^GSPC:S&P 500
U.S. equities pulled back on Friday as investors rotated out of technology stocks into value-oriented sectors. The S&P 500 fell 1.07% to 6,827.41, ending a losing week despite having set a record earlier in the period.
US:^IXIC:Nasdaq Composite
The Nasdaq Composite declined 1.69% to 23,195.17, weighed down by renewed pressure on AI-related stocks. The tech-heavy index finished the week down 1.6% as profit-taking continued in high-growth names.
US:^DJI:Dow Jones Industrial Average
The Dow Jones Industrial Average slipped 0.51% to 48,458.05 after hitting a new intraday all-time high. Despite Friday’s decline, the index posted a weekly gain of 1.1%, supported by strength in value and cyclical stocks.
US:^RUT:Russell 2000
Small-cap stocks outperformed, with the Russell 2000 falling 1.51% on Friday to 2,551.46 but still ending the week up 1.2%, after reaching fresh all-time and closing highs earlier in the week.
US:AVGO:Broadcom
Broadcom shares plunged more than 11% in a single session, dragging on the broader market. The sell-off came despite the company beating fourth-quarter expectations and issuing strong guidance, as investors focused on concerns over margin compression.
US:AMD:Advanced Micro Devices
Advanced Micro Devices declined alongside other AI-related names as sentiment toward the sector weakened amid ongoing rotation into value stocks.
US:PLTR:Palantir Technologies
Palantir Technologies also saw losses as investors reduced exposure to AI-driven growth stocks during the rotation trade.
US:MU:Micron Technology
Micron shares fell in tandem with broader weakness across semiconductor stocks linked to artificial intelligence.
US:V:Visa
Visa gained as financial stocks benefited from the shift toward value, helping support the Dow Jones Industrial Average.
US:MA:Mastercard
Mastercard advanced alongside Visa as investors favored financial services amid expectations of lower interest rates.
US:UNH:UnitedHealth Group
UnitedHealth Group was among the winners in the health care sector, contributing to strength in defensive and value-oriented stocks.
US:GE:GE Aerospace
GE Aerospace rose as industrial stocks attracted inflows during the market’s rotation away from technology.
US:NKE:Nike
Nike shares helped lift the Dow in the prior session, reflecting investor appetite for non-tech leaders.
US:GOOGL:Alphabet
Alphabet declined during the week as high-flying technology stocks came under pressure.
US:NVDA:Nvidia
Nvidia slipped roughly 3% on the week as investors took profits in AI-related names.
US:AMZN:Amazon
Amazon shares edged lower, tracking the broader pullback in growth stocks.
US:ORCL:Oracle
Oracle fell sharply during the week, down more than 12%, after concerns linked to its earnings report. The company later denied reports that it had delayed data center projects for OpenAI, stating there were no delays to contractual commitments.
US:MSFT:OpenAI
OpenAI remained in focus after Oracle reaffirmed that its long-term computing power agreement, reported to be worth $300 billion over five years, remains on track.
US:UBS:UBS Group
UBS said the bull market could extend further, forecasting the S&P 500 could reach 7,700 by the end of 2026. The firm cited strong profitability, accelerating AI adoption, supportive monetary policy, and healthy consumer demand as key drivers.
US:VIX:VIX Index
Market volatility remained subdued, with the VIX hovering near its lowest levels since September, supporting the view that broad-based market pullbacks may remain limited despite ongoing sector rotations.
The newly announced SGX–Nasdaq dual-listing bridge marks a key pillar in the Monetary Authority of Singapore’s (MAS) strategy to revitalise Singapore’s equity market and reposition the country as a leading hub for Asian growth company listings. By offering a simplified pathway for large Asian companies to raise capital and access liquidity simultaneously in the US and Asia, the initiative aims to make Singapore the preferred gateway for the region’s next generation of public market champions.
With more than 60 Southeast Asian unicorns operating regionally, the framework reflects how modern businesses scale across borders and investor bases. However, its long-term success depends on collective action across Singapore’s capital market ecosystem, particularly in strengthening market foundations and mobilising capital flows.
Key measures are already underway to improve liquidity and valuations. The S$5 billion Equity Market Development Programme, with S$3.95 billion committed, targets thin trading liquidity and low institutional participation. Average daily trading value on SGX reached S$1.53 billion in Q3, the highest since 2021, while the Value Unlock programme aims to narrow the 20–30% valuation discount faced by Singapore-listed companies. These initiatives could significantly boost mid-cap stocks, which make up about 70% of SGX listings, and support the upcoming Growth Board.
Beyond institutional capital, activating retail investor participation is seen as critical to the bridge’s sustainability. The initiative could broaden local investors’ access to high-growth regional companies, helping close the gap between where wealth is created in Asia and what is currently listed in Singapore. This places greater responsibility on brokerages and wealth platforms to provide seamless access to dual-listed shares, enable fractional investing, and offer education on growth investing risks and rewards.
Finally, the success of the bridge depends on nurturing a strong pipeline of pre-IPO and scale-up companies. While Singapore excels at supporting startups, more coordinated support is needed for firms in their growth phase, particularly those at Series B and beyond. Strengthening the business environment and aligning ecosystem networks will be key to preparing future billion-dollar companies for public listings.
Together, the SGX–Nasdaq partnership represents a defining moment for Singapore’s ambition to become a durable cornerstone of Asian capital flows — provided the ecosystem can build both the supply of quality listings and the demand through active investor participation.
Separately, the Malaysian ringgit hit multi-year highs against both the Singapore dollar and the US dollar, driven by optimism over Malaysia’s economic outlook, easing trade tensions, and strong domestic fundamentals. The currency has risen 8.2% against the US dollar and 3.3% against the Singdollar year to date, making it Asia’s best-performing currency in 2025.
Analysts from Maybank and DBS cited robust factory output growth, strong foreign bond inflows, a weaker US dollar following recent Federal Reserve rate cuts, and optimism linked to the global tech and AI investment cycle. Maybank expects further ringgit strength, potentially reaching 4.0 against the US dollar by mid-2026, while Malaysia’s central bank is expected to keep interest rates unchanged, providing additional support to the currency.
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