KINGSOFT (03888) shares plummeted 5.03% in intraday trading, as AI concept stocks in Hong Kong faced broad declines. The sell-off comes amid growing concerns over high AI valuations and follows an overnight slump in U.S. tech stocks.

The negative sentiment was fueled by reports that renowned investor Michael Burry, known for his role in "The Big Short," has taken substantial short positions in AI-related stocks like Nvidia and Palantir. Burry's put options, totaling over $1 billion in notional value, account for 80% of his portfolio, signaling his bearish outlook on the AI sector. This move has heightened market anxiety about a potential AI bubble.

Dongwu Securities noted that mixed earnings from major U.S. tech firms have contributed to the cautious sentiment. While some companies like Google have shown positive results from AI integration, others like Meta have raised concerns about future profit erosion due to rising capital expenditures. Despite the short-term volatility, analysts at Dongwu Securities believe that Hong Kong's tech valuations remain attractive from a mid-to-long-term perspective, expecting marginal improvements in earnings per share by Q1 next year for Hong Kong-listed tech companies.