Singapore’s AI-linked stocks concluded trading on a steady note on 19 December 2025, despite ongoing global interest in artificial intelligence. The Straits Times Index (STI) dipped marginally by 0.02% to 4,569.78, with a turnover of approximately S$2.1 billion. Notably, the number of advancers outpaced decliners across the broader market, indicating a resilient local sentiment amidst mixed regional performances.
For investors exploring the Singapore Exchange (SGX) for “AI stocks,” the focus has shifted away from pure-play developers towards companies that enable AI operations, such as data centre REITs, telecom and cloud infrastructure providers, as well as semiconductor equipment manufacturers. With markets absorbing new signals concerning chip demand and geopolitical factors as well as capital rotations into 2026, these “AI enablers” garnered renewed attention.
The slight decline in the STI coincided with varying performances among local banks, while Japan’s Nikkei saw an uptick following the Bank of Japan’s decision to raise its benchmark rate to 0.75%. This context reminds investors of the importance of rate expectations for yield-sensitive assets like REITs, which are often viewed as proxies for AI infrastructure.
A critical observation for AI-linked stocks is that the narrative surrounding AI remains robust, but investors are becoming more discerning. There is a clear differentiation emerging in the market regarding factors such as AI demand visibility—real tangible orders and utilization rates—as well as AI capital expenditure risks related to power, cooling, debt, and funding costs. Additionally, geopolitical considerations, particularly concerning export controls and cross-border chip flows, are gaining prominence.
In terms of investment avenues on the SGX, the most promising AI exposure appears to be categorized into three segments. The first is AI Infrastructure, which includes data centres and digital real estate. The second segment encompasses AI Connectivity and Cloud Enablement, focusing on telecom and enterprise platforms designed for AI readiness. Lastly, the AI Hardware Supply Chain covers semiconductor testing and precision engineering firms that support advanced chip manufacturing.
On 19 December 2025, a snapshot of selected SGX AI-linked stocks revealed the following closing prices: Singtel (Z74) closed at S$4.55; ST Engineering (S63) at S$8.19; AEM Holdings (AWX) at S$1.64; Keppel DC REIT (AJBU) at S$2.19; Digital Core REIT (DCRU) at approximately US$0.490; UMS Integration (558) traded between S$1.38 and S$1.39; and Micro-Mechanics (5DD) at S$1.60.
Market discussions on 19 December also highlighted the evolving debate surrounding the so-called “AI bubble.” Analysts pointed to potential valuation pressures as costs are rising quicker than revenues, raising concerns about the sustainability of AI funding in the United States. This is particularly relevant for Singapore, where the AI landscape leans heavily toward infrastructure and enablers. Should global interest in AI wane, firms with revenue closely tied to long-term contracts may fare better, though capital market tightening could pose challenges to highly leveraged or capex-intensive segments.
Moreover, reports surfaced regarding potential changes in the U.S. export policy for Nvidia’s H200 AI chips, suggesting that shipments to China could proceed under a licensing framework. This development is significant for Asia’s AI supply chain, affecting demand between regions and vendors and influencing order visibility within the ecosystem.
On a more positive note, Micron’s strong forecast related to AI demand provided stability to the broader semiconductor sector. When the semiconductor cycle strengthens, it typically benefits Singapore’s semiconductor services and supply-chain companies involved in testing and equipment manufacturing.
In a report released on 19 December, JPMorgan highlighted a rotation away from crowded AI trades while advocating for selective exposure to Singapore stocks. The firm noted that Asean equities could be on the cusp of a recovery, especially with a potential S$70 billion cash reservoir shifting from deposits into equities, enhancing the local market narrative as it heads into 2026.
Finally, a growing trend indicates that Chinese technology firms, including entities like Manus AI, are relocating to Singapore to mitigate geopolitical risks. This influx could provide second-order benefits to local data centre capacity providers, telecom ecosystems, and enterprise IT firms, thereby increasing demand for local services and hiring.
As Singapore continues to position itself as a neutral hub for tech firms, the broader implications for the SGX AI-linked stocks will depend on the sustainability of this trend and the ability of related firms to capitalize on ongoing digital transformation across sectors. The nuanced dynamics introduced by geopolitical factors and evolving global market conditions will likely shape the trajectory of AI investments in the region.
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