Technology remains a magnet for global investment

The sell-off in technology stocks on Wall Street has highlighted growing investor caution over the enormous sums being poured into artificial intelligence (AI). Over the longer term, however, the downturn may prove to be little more than a correction in the industry's development cycle.

In the October 30 trading session, Intel shares plunged 29%, while Alphabet, Amazon, Nvidia, Broadcom and Qualcomm also came under heavy selling pressure. Concerns that technology giants are spending too much on AI without yet demonstrating sufficient returns have prompted investors to reassess the sector's prospects.

Still, the declines need to be viewed against the substantial gains that preceded them. Before the sharp drop that wiped an estimated $11-12 billion off the value of the US government's investment, Intel shares had risen 150% since the beginning of the year. Nvidia, even after its correction, remained 7.8% higher year to date, having surged 8.2-fold over five years and 116-fold over the past decade.

Many technology corporations now command market capitalizations running into the trillions of dollars, making them major destinations for international investment.

History suggests that periods of speculation and market correction often lead to restructuring, consolidation and the emergence of new industry leaders. Following the dot-com bubble of the early 2000s, Amazon, Google, Microsoft and Apple grew into global powerhouses. Subsequent waves of innovation in smartphones, social media and cloud computing produced companies worth hundreds of billions, and eventually trillions, of dollars.

Today, AI is driving demand for investment in data centers, semiconductors, computing infrastructure and energy. Microsoft, Alphabet, Amazon, Meta and Nvidia are continually increasing spending to expand computing capacity and develop AI ecosystems. Yet their ability to turn those investments into profits will be a decisive factor in determining the appeal of individual companies to investors.

Technology therefore remains attractive to long-term capital, even though not every company will generate returns commensurate with its investment. By late September 2026, information technology stocks accounted for nearly 40% of the S&P 500 index, underscoring the sector's importance to the US stock market.

Vietnam's stock market, by contrast, still lacks homegrown technology companies with the scale and international standing of their global peers. FPT stands out as one of the country's leading technology groups, but its market capitalization of approximately $3.8 billion at the end of October 2026 remains modest compared with the world's largest technology corporations.

Beyond FPT, companies such as VNG, valued at around $620 million, along with CMG, FOX, VGI and ELC, have yet to form a sufficiently large and diverse technology sector capable of drawing substantial international investment.

Even FPT has faced sustained selling pressure from foreign investors. Overseas investors have sold a net $570 million worth of FPT shares since the beginning of the year, while the company's share price has fallen 56% from its late-January 2025 peak, erasing approximately $4.9 billion in market capitalization.

The experience suggests that even Vietnam's leading technology companies are not immune to shifts in global investment preferences and may struggle to retain foreign capital.

Elevated interest rates in major economies have further encouraged international investors to favor markets and companies offering stronger growth prospects, greater liquidity and larger scale. With attractive opportunities increasingly concentrated among the world's leading technology corporations, Vietnam faces intensifying competition for global capital.

Vietnam's paradox: Strong tech FDI, but few domestic champions

FTSE Russell's decision to upgrade Vietnam to secondary emerging market status has opened up opportunities for the country to access international capital. Nevertheless, continued net selling by foreign investors shows that an upgrade and improved market accessibility alone are insufficient to reverse capital outflows in the short term.

According to figures released in early August 2026, foreign investors had sold a net VND 92 trillion ($3.5 billion) worth of shares on the Ho Chi Minh Stock Exchange (HoSE) since the beginning of the year. Cumulative net selling over three years exceeded VND 300 trillion ($11.4 billion).

Foreign ownership in Vietnam's stock market has also declined from around 15% in 2020 to approximately 11%.

Capital outflows reflect a combination of factors, including exchange rates, interest rate differentials, international market volatility, valuations, liquidity and corporate governance standards. The composition of Vietnam's listed companies, particularly the shortage of large technology businesses, also deserves attention.

Vietnam has successfully attracted substantial foreign direct investment (FDI) into technology-related manufacturing, with major investors including Samsung, LG, Intel and companies within Apple's supply chain. These investments have made important contributions to exports, employment and industrial production capacity.

Yet attracting foreign factories does not necessarily translate into the emergence of internationally competitive Vietnamese technology companies.

Core technologies, brands, intellectual property and much of the value added across various stages of production may still belong to foreign businesses.

This highlights the distinction between participating in global supply chains and owning the technologies that underpin them.

Without more domestic companies developing proprietary products and platforms capable of expanding internationally, Vietnam's success in attracting FDI may not translate into equivalent gains for its homegrown technology sector or stock market.

China offers a useful example. The emergence of major corporations in e-commerce, telecommunications, digital platforms and electric vehicles has not only broadened investment opportunities but also stimulated the development of related industries.

For Vietnam, the experience offers lessons in building a stronger domestic technology sector.

Alongside infrastructure investment and efforts to promote manufacturing, Vietnam needs to accelerate the commercialization of research, strengthen its startup ecosystem and help businesses gain access to long-term financing, highly skilled workers and international markets.

Higher standards of corporate governance, transparency and shareholder protection are equally important in enabling technology companies to grow, pursue stock market listings and raise capital.

An emerging market upgrade may open the door to more foreign investment, but the quality of listed companies will ultimately help determine whether that capital stays.

To attract sustainable investment, Vietnam needs not only billion-dollar foreign-invested projects but also homegrown technology companies capable of creating billions of dollars in value.

Manh Ha