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Feb 17
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WATCH
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Mark Cranfield
Cross Asset Strategist, Bloomberg
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These three companies are the dominant AI hardware players in Asia, trading at "multi-year highs" with "very stretched valuations," having absorbed tremendous capital flows. Asian markets are currently closed for Lunar New Year. Liquidity mismatch risk. If US tech/AI equities slip while Asian markets are closed, investors cannot adjust positions. When Asian markets reopen, there is a high risk of a "rush for the exit" to unwind these crowded, high-valuation trades, especially since they lack the defensive bid of US hardware players during the holiday. WATCH for a pullback upon market reopen; potential SHORT if US tech weakness persists this week. US Tech rebounds strongly before Asian markets reopen, validating the high valuations. |
Bloomberg Markets
US-Iran Nuclear Talks in Geneva; Trump Will B...
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Feb 16
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LONG
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Neil Campling
Tech/TMT Analyst
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"With the latest AI chips they used 10 times or 6 times the amount of memory... it takes 3-5 years to build a new memory fabrication plant, and that is creating a bottleneck." Demand is exponential (AI) while supply is inelastic (multi-year build times). This creates a classic super-cycle for memory manufacturers where pricing power shifts entirely to the producers. LONG pure-play memory manufacturers and semiconductor equipment suppliers. Global recession dampening AI capex; rapid resolution of supply chain issues (unlikely given the 3-5 year lead time). |
Bloomberg Markets
Memory Chip Shortage is Global Crisis in the ...
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Feb 16
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LONG
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Neil Campling
Tech/TMT Analyst
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AI chips (specifically Nvidia's Rubin) use 8-10x more memory than H100s. Hyperscaler capex is $600B, but memory supply is constrained. Spot prices are estimated to be up 60% QoQ. You cannot build a fabrication plant in 3 months. The supply-demand imbalance is structural and worsening. This grants immense pricing power to the memory oligopoly (Micron, SK Hynix, Samsung). South Korea (EWY) is the geographic proxy for this trade. LONG Memory Producers and Korean Equities. Global recession crushing demand for consumer electronics (phones/PCs) which these companies also rely on. |
Bloomberg Markets
'Shared Values' discussed in Munich; RAM Conc...
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Feb 16
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LONG
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Neil Kaplan
Bloomberg Senior Strategist
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"It takes between three and five years to build a new memory fabrication plant... creating this bottleneck." Hynix states the situation will "get worse before it gets better." Basic supply and demand. Demand is exploding (AI chips use 10x memory) while supply is inelastic (3-5 year lag). This creates significant pricing power for pure-play memory producers who sell the commodity rather than the finished device. LONG. Structural scarcity benefits the upstream commodity producer. Global recession reducing demand for end-products (smartphones/PCs), which could offset AI demand. |
Bloomberg Markets
Musk, Cook Warn of Memory Chip Crisis as Dema...
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Feb 16
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LONG
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Stephanie Leung
CIO, StashAway
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Leung notes that while the "SaaS apocalypse" (AI replacing software) is shaking markets, the "hardware bottleneck" is the only area with clear earnings visibility. She specifically cites Korea as a beneficiary of the cyclical recovery and AI demand. The "AI Scare" trade is punishing software, but the demand for compute is skyrocketing. Korea (specifically memory chips) sits at the intersection of AI demand and a global cyclical recovery, offering better risk/reward than crowded US software trades. LONG. Focus on the "picks and shovels" of AI where supply is constrained. A global recession dampening cyclical demand for electronics. |
Bloomberg Markets
Laopu Gold, CATL Added to Hang Seng Index | T...
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Feb 16
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LONG
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Min Min Low
China Correspondent, Bloomberg
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While US software/logistics stocks fall, the KOSPI (Korea) is pushing higher. Samsung is rising "inexplicably" to some, but the reporter notes Korean tech is concentrated in Hardware, not Software. Hardware is the "pick and shovel" of AI, whereas Software/Services are the victims of AI automation. Investors are rotating out of "AI Victims" (Software) into "AI Enablers" (Hardware/Memory), benefiting the Korean market. LONG Korean equities and Memory Chip manufacturers as a hedge against the US AI scare trade. Global recession dampening hardware demand. |
Bloomberg Markets
AI 'Scare Trade' Takes Hold; Talabat FY Earni...
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Feb 13
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LONG
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Mixo Das
Asia Equity Strategist, J.P. Morgan
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J.P. Morgan set a base case target of 6,000 and a bull case of 7,500 for the KOSPI. Samsung and SK Hynix are warning of supply shortages in memory chips. The memory sector is lifting the entire Asian benchmark, insulating it from the US "scare trade." The bull case assumes capital repatriation and a broadening rally beyond just two stocks (Samsung/SK Hynix) into defense and shipbuilding. LONG. The sector is benefiting from a supply/demand imbalance and rising prices across all memory categories (DRAM/NAND). Global equities entering a prolonged downturn would drag Korea down regardless of sector strength. |
Bloomberg Markets
Chinese Stocks Can't Wait for Holiday Break, ...
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Feb 13
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LONG
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Grace Tam
Chief Investment Adviser, BNP Paribas Wealth Management
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Tam states they favor "AI enablers" specifically "semiconductors, arms, the infrastructure, and especially some of the power related themes." She highlights severe shortages in memory chips and logic wafers in Taiwan and South Korea. While the market sells off "AI losers" (software), the capital expenditure on data centers is not slowing down. This creates high earnings visibility for the hardware manufacturers supplying the shortage. LONG the upstream hardware providers. A sudden halt in global AI CapEx spending. |
Bloomberg Markets
How AI Is Proving to Be a Double-Edged Sword ...
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Feb 13
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LONG
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Peter Elstrom
Senior Editor, Bloomberg Technology
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Samsung has sent its first shipment of HBM (High Bandwidth Memory) to customers. Kioxia forecasts better-than-expected operating income due to strong data storage demand. The "AI Angst" trade does not apply to the hardware enablers. Data centers require massive memory upgrades. Samsung catching up to SK Hynix creates a broader supply base for Nvidia, validating the "supercycle" in memory chips. Additionally, the Korean government is incentivizing "Ants" (retail investors) to repatriate cash into domestic stocks. LONG. Strong secular demand for memory (HBM) combined with domestic liquidity flows in Korea. Oversupply if Samsung ramps production too quickly. |
Bloomberg Markets
AI Angst Rocks Asia Markets | The Asia Trade ...
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Feb 12
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LONG
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Guy Johnson
Anchor, Bloomberg
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Lenovo and Cisco are down because "memory prices are up," squeezing their margins. ASML is seeing strong orders for AI glass. If hardware makers (Lenovo) are getting squeezed by component costs, the component makers (SK Hynix/Samsung) have pricing power. UBS notes semi margins remain extremely high (40%+) and the AI hardware trade is not over. LONG the Memory/Semi supply chain. Oversupply in memory chips later in the year. |
Bloomberg Markets
Nuveen to Buy Schroders in Near £10 Billion D...
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Feb 12
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LONG
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Abeer Abu Omar
Reporter, Bloomberg London
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Cisco's margins are "really hurt by this crunch, this unprecedented crunch in memory chips... That crunch has sent prices skyrocketing." One company's cost crunch is another's margin expansion. If memory prices are skyrocketing due to shortages, the manufacturers of those chips possess immense pricing power and will see earnings beats. Long the suppliers of memory. Sudden drop in AI/Data center demand resolving the shortage. |
Bloomberg Markets
Stocks Climb; Nuveen to Buy Schroders; Anthro...
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Feb 12
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LONG
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Brent
Investment Analyst / Guest
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"Micron, SK Hynix, Samsung have sold everything they can produce through 2026." The speaker notes the "pricing power is incredible." The memory chip market has consolidated into an oligopoly. With supply completely locked up for the next two years due to AI demand, these companies have removed the typical cyclical risk of oversupply, guaranteeing high margins. Long the memory manufacturers as they have unparalleled earnings visibility. Unexpected demand destruction in the AI sector or regulatory intervention. |
Bloomberg Markets
Trump Tells Netanyahu He Prefers Iran Deal | ...
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Feb 12
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LONG
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Stephanie Aliaga
Global Market Strategist, JPMorgan Asset Management
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Aliaga states that while the "AI Scare Trade" hurts software, the "nuts and bolts" of AI are still in high demand. She explicitly notes, "Memory is really the bottleneck here, not just the raw intelligence... these agents require memory." As AI shifts from simple chatbots to "Agentic AI" (complex tasks), the computational load on memory chips increases exponentially. Pricing power for memory manufacturers (Samsung, SK Hynix, Micron) is surging because demand outstrips supply, and they have "real moats." LONG Memory manufacturers as the primary beneficiaries of the next phase of AI capex. Hyperscalers (Microsoft, Google, Meta) cutting capex spending due to lack of immediate ROI. |
Bloomberg Markets
China's Zhipu Jolts AI Race as 'Scare Trade' ...
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Feb 09
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LONG
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Steve H.
Quantitative Researcher at Bloomberg / PhD in Financial Econometrics
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Steve points out that memory and storage stocks (Micron, SK Hynix) have gone vertical. He references the rising rental price of Nvidia H100s as proof of compute demand. More compute requires more memory. These are cyclical commodities that are currently in a "super cycle" due to the step-function increase in demand from AI agents (which consume far more inference compute than humans). LONG. A direct hardware play on AI scaling laws. Cyclical downturn in memory prices if AI capex slows down. |
Thread Guy
WTF is crypto doing!? Are we BACK..? AI takin...
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