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Shares in Naspers rose the most in a month on Tuesday as a $1.5bn block sale by Tencent of a rival’s shares helped win back investors who are increasingly concerned about an AI bubble developing in the tech sector.Fears of overspending on AI, with broader macroeconomic pressures, have cooled valuations in the sector in recent weeks, with the tech-heavy Nasdaq down 1.8% this month in addition to a 2.8% decline in June. (Dorothy Kgosi) South Korea’s stock exchange, dominated by chipmaking leaders Samsung and SK Hynix, has slumped more than 10% over the past month. The Kospi, the exchange’s benchmark index, had soared 150% over the past year when a sudden jump in the price of memory chips used in AI data centres prompted investors to flock to the brands, which dominate production.As AI fears loom over the global tech landscape, Naspers’ share price slumped to its worst in nearly 18 months last week, adding to a sell-off that has eliminated more than a fifth of its value so far this year and halting four consecutive years of double-digit gains.Tuesday’s cash windfall, with a stellar earnings report from Prosus last week, has sparked a turnaround in sentiment, and Naspers shares are up about 7.86% after two consecutive days of gains.Read: ANALYSIS | Naspers yet to crack how to monetise AI platform ToqanClawThat does not mean the group is betting against AI, however. Naspers, which indirectly owns about R2-trillion worth of Tencent, spent more than $100m investing in AI at its operations in the year to end-March and has embedded AI expenditure across all its business units as part of its growth strategy.Nearly a third of last year’s AI expenditure was allocated to online classifieds platform OLX, where users can buy, sell or exchange goods and services free of charge. The unit has spent more than $200m on AI since 2018.Tencent has also been courting AI in its messaging platform, WeChat. Reports that the company was developing an AI agent for use in the app saw Naspers shares rally more than 10% in a day at the start of June.Shares in Naspers and Prosus climbed to their highest levels in a week on Tuesday after recording their biggest intraday gains since June 2. Naspers was up 5.16% at R853.07 and Prosus 4.15% to R732.Bloomberg reported that Tencent had sold $1.5bn worth of stock in rival company Kuaishou Technology, the biggest such block trade in Hong Kong this year. The rival’s share price reportedly slid as much as 9.3% on the news.
