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Feb 16, 2026
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LONG
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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 12, 2026
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AVOID
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A Chinese company (implied DeepSeek context) launched a model with double the parameters at a lower cost, which "led to a software selloff in the U.S." The rapid advancement and commoditization of AI models by Chinese competitors are eroding the pricing power and "moats" of traditional US software companies. Cheaper, open-source, or foreign alternatives are undercutting the "per-seat" SaaS pricing model. Avoid US Software stocks exposed to AI deflationary pressure. US trade barriers or tariffs blocking Chinese software adoption. |
Bloomberg Markets
Trump Tells Netanyahu He Prefers Iran Deal | ...
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Feb 12, 2026
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SHORT
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NetEase Q4 gaming revenue missed estimates (down 4%). Net income declined nearly 30%. The company is missing on fundamental metrics despite "AI integration" narratives. The core business (gaming revenue) is shrinking, and the "AI Scare Trade" is negatively impacting sentiment around Chinese tech/gaming names. SHORT NetEase on fundamental deterioration. A hit new game release revitalizes revenue or aggressive share buybacks. |
Bloomberg Markets
China's Zhipu Jolts AI Race as 'Scare Trade' ...
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