Industrial Securities Co.,Ltd. has released a report indicating that, from a PEG (Price/Earnings to Growth) perspective, South Korean technology stocks present the most attractive value. Following them are the SOX (PHLX Semiconductor Sector Index), the Hang Seng Tech Index, Japanese technology stocks, and the ChiNext (China's Growth Enterprise Market). The firm asserts that valuations on the STAR Market are reasonable and not overinflated.
This month, the so-called "Mag 7" stocks have declined by over 10%. The report notes that their price movements this year have shown a high correlation with the recently discussed Token Expenditure Index.
Capital expenditure (Capex) expectations for Hyperscalers for 2026 and 2027 have been revised upward by $200 billion and $300 billion, respectively, since the start of the year. Concurrently, profit forecasts for global core computing power companies have been revised up by $380 billion and $690 billion for the same periods. Notably, five overseas memory companies account for approximately 80% of these profit revisions.
The recent outperformance of A-share technology stocks compared to their overseas counterparts has puzzled the market. However, the report draws a parallel to the "climax" phase of the dot-com bubble (1999-2000), during which Japanese technology stocks, influenced by overseas trends, also outperformed U.S. tech stocks.
Market volatility has been elevated recently. Drawing on the dot-com era as a reference, volatility also expanded significantly during the middle to late stages of that rally. From late 1998 to early 2000, the Nasdaq's monthly average volatility and the proportion of trading days with declines exceeding 3% rose markedly.
The report reiterates a previous point, stating that the growth rate of Hyperscalers' capital expenditures serves as the simplest and most effective tracking indicator for forecasting the AI industry trend and gauging the sustainability of the AI market rally. Furthermore, the growth rate of South Korea's (semiconductor) export value can function as a high-frequency observation metric for this trend.
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