Three pieces of advice HSBC has for AI investors
Investors should focus on tech with the strongest monetization and less-stretched valuations, such as South Korean memory chips and Taiwan's semiconductors.
TL;DR
- HSBC recommends focusing on tech sectors with strong monetization and less stretched valuations, particularly in South Korea and Taiwan.
- South Korean memory chip stocks are seen as fundamentals-supported despite recent corrections, with rising capex demand and shareholder returns.
- Taiwanese semiconductors are expected to broaden beyond GPUs in AI, with custom ASICs gaining traction among hyperscalers.
- Mainland China's domestic AI semiconductor and hardware sectors are favored due to policy support, localization, and inference growth.
- China's supply constraints for less efficient local chips can drive demand for packaging, networking, and power infrastructure.