Min Min Low

Tech stocks in Asia, such as Samsung, SK Hynix, and TSMC, are driving market gains as investors focus on momentum trade and AI demand, brushing past negative geopolitical headlines.

Asian markets (China, Taiwan, Korea) are rallying despite the new 10% US tariffs. Investors see the 10% rate as "clarity" compared to previous uncertainty. The "AI Risk" report that crushed US software stocks is viewed differently in Asia. Asian tech is seen as "upstream" (infrastructure, materials, picks and shovels) which enables AI, rather than "downstream" apps that AI disrupts. Additionally, China has already diversified trade, making the tariff impact less severe than feared. LONG Asian hardware and infrastructure plays. Trump follows through on the threat to raise tariffs from 10% to 15% or higher immediately.

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.

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.

China's Moonshot AI unveiled Kimi K3, a model that outperforms most rivals despite lacking advanced Nvidia chips, demonstrating that Chinese AI can be better and cheaper. This raises doubts about the justification for the massive CapEx (over $600 billion) by Samsung and SK Hynix in new factories, causing a sharp selloff in their stocks (Kospi down >6%) as investors reassess the necessity of such spending.

China's Moonshot AI unveiled Kimi K3, a model that outperforms most rivals despite lacking advanced Nvidia chips, demonstrating that Chinese AI can be better and cheaper. This raises doubts about the justification for the massive CapEx (over $600 billion) by Samsung and SK Hynix in new factories, causing a sharp selloff in their stocks (Kospi down >6%) as investors reassess the necessity of such spending.

Meta is entering the cloud infrastructure space by selling excess computing power via API services, which will boost its revenue and margins at a time when capex spending had raised concerns about overinvestment. The stock reacted positively overnight, and this move positions Meta to compete with dominant players like AWS.

Quantum-linked stocks in Asia, particularly Korean quantum names, are seeing huge jumps due to NVIDIA's open-source AI model that accelerates quantum computing progress, indicating investor optimism in this niche.

1. FACT: Alibaba is revamping its business to bring its flagship Qwen AI model, consumer apps, and enterprise tools under a single umbrella called "Alibaba Token Hub" to focus on monetization. 2. BRIDGE: Consolidating AI efforts under a "Token Hub" signals a shift from cash-burning R&D to direct commercialization (charging per computing token). This structure allows for faster product iteration, better integration with existing cash cows (Taobao, Alipay), and improved ROI on heavy AI infrastructure investments. 3. VERDICT: LONG. The market is rewarding the pivot toward tangible AI monetization, providing a clear catalyst for multiple expansion. 4. KEY RISK: Intense domestic competition from Tencent's WeChat ecosystem, which may leverage its massive user base to capture enterprise AI market share more effectively.

China imports 30% of its LNG through Hormuz. If disruption lasts >1 month, China may be "forced to buy" from the US. China may roll back tariffs on US energy to secure supply. This creates a direct demand surge for US Liquefied Natural Gas exporters (Cheniere) and producers (EQT). Long US LNG. Geopolitics is forcing a structural shift in energy flows from the Middle East to the US. China pivots to Russia for supply instead of the US.

China imports 30% of its LNG through Hormuz. If disruption lasts >1 month, China may be "forced to buy" from the US. China may roll back tariffs on US energy to secure supply. This creates a direct demand surge for US Liquefied Natural Gas exporters (Cheniere) and producers (EQT). Long US LNG. Geopolitics is forcing a structural shift in energy flows from the Middle East to the US. China pivots to Russia for supply instead of the US.

Asian equities are having their best February ever, driven specifically by "Upstream AI" and infrastructure build-out. Shargh Capital remains bullish on "Infrastructure, Semiconductors, and Chips." The market is bifurcating. While consumer hardware struggles, the capital expenditure cycle for AI infrastructure remains robust. The trade is to own the "picks and shovels" (Upstream) rather than the consumer end-products. LONG. "AI Scare" volatility or a sudden pullback in hyperscaler CapEx.

Asian equities are having their best February ever, driven specifically by "Upstream AI" and infrastructure build-out. Shargh Capital remains bullish on "Infrastructure, Semiconductors, and Chips." The market is bifurcating. While consumer hardware struggles, the capital expenditure cycle for AI infrastructure remains robust. The trade is to own the "picks and shovels" (Upstream) rather than the consumer end-products. LONG. "AI Scare" volatility or a sudden pullback in hyperscaler CapEx.

A supply disruption in Zimbabwe (export issues) has caused a jump in lithium prices. Supply shocks in critical minerals historically lead to sharp, short-term price spikes in the underlying commodity and related equities, particularly Chinese downstream clients. LONG Lithium exposure. If the Zimbabwe disruption is resolved quickly, the risk premium will evaporate.

Asian markets (China, Taiwan, Korea) are rallying despite the new 10% US tariffs. Investors see the 10% rate as "clarity" compared to previous uncertainty. The "AI Risk" report that crushed US software stocks is viewed differently in Asia. Asian tech is seen as "upstream" (infrastructure, materials, picks and shovels) which enables AI, rather than "downstream" apps that AI disrupts. Additionally, China has already diversified trade, making the tariff impact less severe than feared. LONG Asian hardware and infrastructure plays. Trump follows through on the threat to raise tariffs from 10% to 15% or higher immediately.