Preliminary results from Samsung sparked a global selloff in AI-linked stocks today, as investors fret about whether the memory cycle has reached its peak.
But for fund manager Mikhail Zverev, "the fact that some hot money got overextended and a bit of a correction is going on today isn't the reason to sell memory stocks."
Of greater concern for hot chip stocks, he says, is the emergent threat of Chinese competitors, who he says could disrupt the industry over the next two to three years.
Chinese players Yangtze Memory Technologies and ChangXin Memory Technologies benefit from significant state support. Zverev, who co-manages the Amati Global Innovation Fund, says Beijing is using a playbook similar to the one that turned Chinese EVs into a global success:
The investments seem to be paying off: CXMT notched a 17-fold increase in profit in the first-quarter and is preparing to raise about $4 billion in a Shanghai listing. YMTC has also taken steps toward its own highly anticipated IPO.
"We're still holders of Samsung Electronics, but we're a lot more nervous holders than we were this time last year," Zverev said.
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