Global stock markets have recently benefited from a rebound in artificial intelligence (AI) stocks. Beyond the South Korean market gaining over 10% last week, the S&P 500 hit a record high, and the Nasdaq has once again approached its historic peak.
Chow Huen-tong, a global market strategist at Morgan Asset Management, highlighted three key factors supporting the upward trend in AI stocks, predicting the sector's outlook remains optimistic. She noted that strong quarterly earnings results from AI companies, coupled with solid growth in the industry chain and a sustained surge in capital expenditure (Capex), have dispelled earlier market concerns. Additionally, the likelihood of a major escalation in geopolitical tensions appears low, keeping energy prices under control. Meanwhile, both U.S. inflation and the Producer Price Index have met market expectations, suggesting the Federal Reserve may hold interest rates steady in the near term, which further benefits tech stocks.
Chow also mentioned that many fund managers believe AI's positive factors are only partially priced in, indicating continued market confidence in the sector's prospects. Regarding the A-share and H-share markets, she noted that earnings forecasts for related AI stocks still have room for upward revision, though capital inflows remain concentrated in three key areas: semiconductors, hardware, and robotics. In a direct comparison between Chinese and U.S. AI development, she argued that the U.S. holds an edge in frontier models and computing power, but China is more competitive in terms of cost-effectiveness and faces no energy shortages. In contrast, the rapid increase in electricity consumption in the U.S. is constraining AI advancement, leading investors to also look at China's power grid sector. On the large model front, she believes the industry's ultimate success hinges on the ability to monetize these models, thereby boosting profitability.
Comments