KUALA LUMPUR (Jan 16): Data centre-related stocks and proxies to artificial intelligence (AI) on Bursa Malaysia have fallen sharply of late, but analysts caution against buying the dip too soon.

YTL Power International Bhd (KL:YTLPOWR), which is setting up its own data centres using Nvidia Corp’s latest chips, plunged 13.4% in the first two weeks of 2025. Telekom Malaysia Bhd (KL:TM) and TIME dotCom Bhd (KL:TIMECOM), both of which have data centre business, are also down.

The biggest challenge for data centre-related investment themes, several analysts told The Edge, lies in downgrades of valuations amid the US tightening restrictions on exports of advanced semiconductors.

“The incoming Donald Trump administration is unlikely to reverse the outgoing Joe Biden policies,” according to one who declined to be named. “However, if further negative developments occur, the downside risk is significant.”

On Wednesday, the US put 25 Chinese firms and two Singapore-based companies on a restricted trade list, including Sophgo Technologies Ltd, which the Biden administration claims are acting at the behest of Beijing to further their goals of indigenous advanced chip production.

The overall goal, according to the US Department of Commerce’s Bureau of Industry and Security, is to prevent the diversion of certain high-end chips critical for military advantage to China.

“The reality is that chip restrictions will undoubtedly slow Malaysia’s efforts to become a data-centre hub in the long run, which will also hinder the country’s ambition to move up the value chain,” said another analyst. “In short, this will result in slower technological advancement.”

Shares of some proxies to the mushrooming data centres in construction and property sectors have also fallen sharply since the start of 2025.

Among construction firms, Gamuda Bhd (KL:GAMUDA) lost about 9.3% while MN Holdings Bhd (KL:MNHLDG), which bagged a job to undertake power landing station works for a data centre, declined 20.8%.

Sime Darby Property Bhd (KL:SIMEPROP), which is leasing its land for data centre facilities, has retreated more than 10%. Mah Sing Group Bhd (KL:MAHSING), which has a joint venture with Bridge Data Centre, is down nearly 20%.

Mah Sing had said on Jan 14 that its data centre projects will pass through the proposed US restrictions on advanced computing and AI chips, just before the additional round of measures were announced a day later.  

In the technology sector, Inari Amertron Bhd (KL:INARI), which provides outsourced semiconductor assembly and testing, has slipped more than 10% year to date amid concerns that the company could encounter intensifying challenges as the incoming Trump administration escalates trade tensions.

Shares of VSTECS Bhd (KL:VSTECS) — Malaysia’s first distributor of Amazon Web Services — have retreated 15.96% year to date.