ASX investors were handed a rough lead from Wall Street overnight after US chip stocks were heavily sold down.
The sell-off was centred on some of the biggest names in the artificial intelligence (AI) trade, with investors taking profits after a very strong run.
Overnight, the Nasdaq Composite Index (NASDAQ: .IXIC) fell 2.2%, while the Philadelphia Semiconductor Index (NASDAQ: SOX) dropped 7.9%.
Some of the bigger falls came from the names that have been riding the AI boom.
Micron Technology Inc (NASDAQ: MU) dropped 13% to US$1,051.77, Nvidia Corp (NASDAQ: NVDA) fell 4.1% to US$200.04, while Qualcomm Inc (NASDAQ: QCOM) and Marvell Technology Inc (NASDAQ: MRVL) lost 8% and 9.4%, respectively.
While this might sound like a warning sign for ASX tech shares, the local market has gone the other way today.
At the time of writing, several large ASX tech shares are trading higher, despite the weak US lead.
So, why are ASX tech shares rising?
ASX tech shares move higher
The main reason is that ASX tech shares aren't really chip stocks.
The overnight selling was focused on US companies closely tied to semiconductors, memory chips, and AI infrastructure.
And that is not quite the same as our local tech sector.
Xero Ltd (ASX: XRO) is an accounting software business. WiseTech Global Ltd (ASX: WTC) provides logistics software, while Pro Medicus Ltd (ASX: PME) sells medical imaging software.
So, while the US sell-off is clearly worth watching, it doesn't directly change the outlook for most ASX tech names.
There also appears to be some bargain hunting going on.
A number of local tech shares have already been hit hard in 2026, with Xero and WiseTech both under heavy pressure recently.
At the time of writing, Xero shares are up 7.1% to $69.63, while WiseTech shares are up 13.42% to $32.62.
Pro Medicus shares are 2.1% higher at $176.75, and NextDC Ltd (ASX: NXT) shares are up 2.20% to $14.85.
What should ASX investors watch now?
The key thing to watch is whether the selling stays in US chip stocks or starts spreading across the broader US tech sector.
If investors keep taking money out of the AI trade, ASX growth shares could still feel some pressure, especially those trading on higher valuations.
But for now, the local market is holding up reasonably well.
And that is likely because many ASX tech shares have already had a difficult run in 2026.
Xero and WiseTech, in particular, are both still well below where they were a year ago, despite today's bounce.
The post US chip stocks were smashed overnight. So why are ASX tech shares rising? appeared first on The Motley Fool Australia.
Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Marvell Technology, Micron Technology, Nvidia, Qualcomm, WiseTech Global, and Xero. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool Australia has recommended Nvidia and Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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