Charlotte Yang 2.2 5 ideas

TSMC reported better-than-expected first-quarter net income and strong gross margins, driven by robust AI chip demand, with expectations of raised guidance and sustained growth despite Middle East war concerns, highlighting the resilience of AI infrastructure investment.

TSMC delivered strong earnings growth, beating consensus estimates with a 58% surge in net income and higher gross margin, demonstrating resilience to geopolitical risks like the Middle East war and effective cost control despite rising raw material prices. The key driver is AI demand, and the company is expected to raise its sales guidance and maintain high capital spending, indicating sustained growth from demand from major customers like Apple and Nvidia.

JD.com reported its first quarterly loss in four years due to intense competition in food delivery. Mainland investors sold a record amount of Hong Kong shares in a single session, rotating out of internet stocks. The "platform economy" in China is suffering from a price war (deflationary pressure) and regulatory fatigue. Capital is fleeing these names to chase state-sanctioned "hard tech" (semiconductors) instead. The fundamental earnings power of the internet giants is eroding. Avoid or Short Chinese internet majors. A sudden stimulus package from Beijing specifically targeting consumer spending could trigger a short squeeze.