Big tech company shares fall on global exchanges due to doubts about AI investments

Reha Junjhunwala's investments in stocks fell by 50% on Wednesday. Some trading applications showed a drop of up to 50%, but this decline was not due to a reduction in invested funds, but rather to corporate changes.

The reason for such a sharp drop was the distribution of an exclusive stock bonus (ex-bonus) across all Concord Biotech shares on Wednesday, according to previously announced corporate actions. This decision was linked to the announcement of a bonus issuance for relevant shareholders, which reflected in the sharp decrease in share price.

Concord informed the stock exchange documentation that the company's board of directors, at a meeting held on October 27, 2026, set November 4 as the record date. The purpose of this date is to determine shareholders' right to receive bonus shares at a ratio of 1:1, meaning one bonus share for every fully paid existing share. This condition is subject to regulatory approval.

This means that all relevant Concord Biotech shareholders will receive an additional share for each share they hold on the record date. The total number of shares held by all relevant shareholders will double, but the share price will be adjusted accordingly, which will not change the total invested value.

Concord Biotech shares closed on Tuesday at a price of 1229.90 rupees, and after the bonus share issuance adjustment, they opened on Wednesday at a price of 610 rupees. It is possible that some trading applications displayed the unadjusted price from the previous day, which created the impression of a 50-52% drop on the exchange.

After the split adjustment, Concord Biotech shares initially fell to 595 rupees at the beginning of the session, but on Wednesday, they recovered, rising by 4.8% to 623.65 rupees. Meanwhile, the company's total market capitalization approached 13,000 crore rupees. The shares decreased by 24% compared to the 52-week high reached in August 2026 at 807.03 rupees. Nevertheless, the current price is 26% higher compared to the 52-week low recorded in April 2026 at 493.53 rupees.

Concord Biotech Limited, founded in 1984, is a biopharmaceutical company engaged in research and development in India and is among the country's leading API companies. Concord Biotech shares were first listed in August 2023 when the company raised 1,550.52 crore rupees at a price of 741 rupees per share. Currently, the shares are trading 70% above their adjusted IPO price.

Three discretionary trusts established in honor of the children of the late prominent investor Rakesh Junjhunwala own approximately 2.52 crore shares of the company (or 5.04 crore shares based on post-adjustment), representing a 24.10% stake. The value of this stake is currently estimated at 3,143.10 crore rupees.

A significant decline was observed in the American market late in the evening. The main US index, S&P, fell by 2.06 percent. Intel shares dropped by 28 percent, and the quotes for NVIDIA, AMD, DELL, and HP also decreased significantly. Because of this, the composite Nasdaq index closed down by 2.86 percent.

This sharp drop has caused alarm among global investors, as there is a suspicion that the artificial intelligence (AI) bubble in the US is beginning to burst. A similar trend was also observed in the Chinese market over the past few months, where shares of companies related to AI investments showed a strong decline.

The Shanghai Stock Exchange's technology index (STAR 50) lost about 40 percent in less than four months, equivalent to a loss of approximately $3.5 trillion. In China, there has also been a substantial fall in the shares of the AI and semiconductor sectors, and this decline continues. A similar scenario is unfolding in the US market, where up to $1.8 trillion was lost in just one day.

The largest single-day drop in the Nasdaq composite index since June 5th occurred on Friday. This was attributed to poor quarterly reports from Intel and Amazon. After these results were published, it became clear that the returns from massive AI investments did not meet expectations, which triggered active profit-taking in these stocks. Questions have previously been raised about when AI investments will start yielding profits, whether this approach is correct, and if AI will provide future benefits; answers to these questions have not yet been found.

Since the financial performance does not meet expectations, investors are disappointed, and there is a view that the AI bubble may burst soon. This sentiment led to the serious decline in the American market on Friday.

The Nasdaq composite index closed on October 30 at 25,437 points, down 747 points. The S&P 500 also fell by 2.06 percent, ending trading at 7,581. The Dow Jones Industrial Average decreased by 572 points, representing 1.09 percent, reaching 51,770. This decline may affect global stock markets on Monday, November 3rd. A particularly sharp decline is possible in the South Korean and Taiwanese markets, as growth in these markets largely depended on technology stocks.

A decline was observed in the stock market on the last trading day and throughout the fourth consecutive session. The Sensex index fell by 1250 points from its daily high, but after the market closed, it showed a significant recovery. Nevertheless, investors in the Indian market incurred losses amounting to about 700 billion rupees.

The market capitalization of the BSE reached 458 billion rupees on Thursday, and by Friday, it decreased by approximately 700 billion rupees to 451 billion rupees. The main reason for this sharp drop was the massive sell-off of stocks in the small and mid-cap segments.

After the sharp fall on Friday, the BSE Sensex recovered, declining by only 125 points and settling at 73,123.83. The Nifty index dropped by 87 points, reaching the level of 22,600. Previously, Nifty had touched the lower level of 22,372, and Sensex had touched 72,452.37.

On Friday, stocks of mid-cap and small-cap companies experienced a serious decline. At the close of trading, the BSE 150 Midcap index fell by 2.10%, closing at 15,143.47, while the BSE 250 Smallcap declined by 2.68%, ending trading at 6,440.65. Shares of Jammu & Kashmir Bank lost more than 16 percent, while Swiggy shares fell by approximately 17%. These two companies became the stocks of the day in the mid-cap and small-cap sectors.

Most stocks in the small and mid-cap segments were in a decline zone of more than 3 percent on Friday, leading to a significant reduction in investor portfolios. Among the top 30 BSE stocks, the largest drop was recorded by Tata Steel, which fell by 3.21 percent. Twenty stocks closed in the red, and the remaining ten closed in the green. Eternal's shares, conversely, closed with a gain of about 4 percent.

The primary reason cited for the decline is the crude oil situation, whose price reached $115 per barrel. Brent Crude Oil rose by 1.33% on Friday, reaching $114.67 per barrel. This rise is attributed to the Houthi attack on Saudi Arabia. Furthermore, foreign investors continue to increase their selling. On October 22, foreign investors sold Indian stocks worth 16,113.89 crore rupees, while DII supported the market by buying stocks worth 14,519.12 crore rupees.

Large-scale selling was observed among both retail investors and foreign participants in the small and mid-cap segments. The results of some companies' reports also influenced the market.