Thai Stocks Tumble on Microsoft Data Centre Slowdown Fears

The Thai stock market witnessed a sharp downturn on Friday following news that Microsoft is scaling back or halting data centre development projects across multiple regions. 

The SET index plummeted to a low of 1,135 points, currently hovering around 1,136 points, as investors reacted to the potential implications for the electronics sector.

Trading opened at 1,155 points, but quickly descended as major stocks, led by GULF, experienced significant sell-offs, with GULF shares dropping by 5.13% to 46.25 baht.
 

KGI Securities (Thailand) has advised investors to steer clear of the electronics sector, citing Microsoft's decision to delay or abandon data centre projects in the UK, Australia, and several US states, as reported by Bloomberg.

While analysts suggest that Microsoft's adjustments may not signal an outright AI bubble, they do indicate a potential recalibration of supply and demand. Microsoft maintains its planned $80 billion investment for 2025.
 

However, the slowing or cancellation of data centre projects has raised concerns that the sector's growth may be decelerating. This has triggered negative sentiment towards electronics stocks, fueled by fears that AI adoption may be slower than previously projected.

Adding to the market's unease is the looming threat of increased tariffs from a potential second term for Donald Trump, further destabilising the electronics sector.

The market is now closely monitoring future data centre demand and the broader implications of Microsoft's strategic adjustments.