AI Rally Under Pressure as Asia Stocks Reverse Early Gains | Insight with Haslinda Amin 07/01/2026

Watch on YouTube ↗ | July 01, 2026 at 06:58 | 47:29 | Bloomberg Markets

Speakers

Anthony — Reporter, Bloomberg

Lorraine Tan — Morningstar Director of Asia Equity Research

Mike Cannon-Brookes — Co-founder, Atlassian

Sonal Varma — Chief India Economist, Nomura

Alex — India Equities Reporter, Bloomberg

Summary

Asian equities started H2 under pressure, reversing early gains as the AI rally matures. Morningstar's Lorraine Tan warns that AI chip valuations are stretched, expecting a potential 20-30% correction, while highlighting laggards like TSMC and Advantest. Atlassian's CEO pushes back against margin fears, and Nomura's Sonal Varma sees near-term strength for the Indian rupee on lower oil and strong bond inflows.

Asian stocks fade after best quarter in 17 years, with rotation emerging within the AI trade.
Lorraine Tan sees AI chip valuations as stretched, expects spending taper and a correction; she favors TSMC, Advantest, American Silicon, Chinese healthcare, Chinese banks, Tencent, and China overall.
Anthony notes Korea under foreign outflow pressure and memory cycle concerns, while Taiwan's rally broadens to smaller names.
Atlassian CEO Mike Cannon-Brookes says demand is strong and margins will stay robust, dismissing AI cost fears.
India's growth outlook improves with lower oil prices, but a weak monsoon poses inflation and rural demand risks.
Nomura's Sonal Varma highlights a positive balance-of-payments swing and expects Indian rupee outperformance in coming months.
Anthropic's Fable 5 AI model gets U.S. export restriction lift, boosting its IPO prospects.
Yao Ming discusses basketball's role in connecting the U.S. and China.

Ideas

Anthony Reporter, Bloomberg 2:06

Korean equities weakening, memory cycle may top.

Korean equities are under heavy foreign selling pressure, with the market concerned that the memory cycle may be topping as Samsung and SK hynix investments add supply while Chinese capacity comes online and customers push back on memory prices, suggesting further weakness in Korean stocks and the won.

Anthony Reporter, Bloomberg 2:38

Taiwan rally broadening, monitor inference bottlenecks.

The Taiwanese equity rally is broadening beyond TSMC into smaller niche players as investors look for AI inference bottlenecks and country-specific AI implementation dynamics, making this a key dynamic to monitor.

Lorraine Tan Morningstar Director of Asia Equity Research 5:25

AI chip stocks overvalued, correction likely.

AI-related semiconductor stocks are priced for perfection, with the market extrapolating strong growth through 2028, but we expect AI spending growth to taper, supply to catch up with demand, and memory pricing to soften, leading to a potential 20-30% correction in many names; we have very few buy calls in tech at the moment.

Lorraine Tan Morningstar Director of Asia Equity Research 12:18

TSMC laggard, long-term value.

TSMC has been a laggard in the recent AI rally and offers long-term value, making it a quality name we like for the long term.

Lorraine Tan Morningstar Director of Asia Equity Research 12:24

Advantest order book visibility improving.

Advantest, a semiconductor equipment company, is seeing better visibility on its order book going forward, making it an attractive pick.

Lorraine Tan Morningstar Director of Asia Equity Research 12:36

American Silicon chip laggard opportunity.

American Silicon is a laggard on the chip side and presents an opportunity within the semiconductor space.

Lorraine Tan Morningstar Director of Asia Equity Research 13:02

Asian healthcare ripe for re-rating.

Healthcare in Asia underperformed last quarter and is ripe for re-rating upward, with quality names like Chinese biotech offering solid drug portfolios and decent growth rates.

Lorraine Tan Morningstar Director of Asia Equity Research 13:49

China equities cheap, set to recover.

China is much cheaper and underperforming, and we expect stronger economic performance in the second half as fiscal spending comes through, which should lift sentiment and benefit Chinese equities.

Lorraine Tan Morningstar Director of Asia Equity Research 14:30

Chinese banks margin squeeze bottming.

Chinese banks performed well in the first half, and the squeeze on margins should bottom this year, creating a healthier environment for the sector.

Lorraine Tan Morningstar Director of Asia Equity Research 14:54

Tencent AI cost savings beneficiary.

Tencent is an overlooked beneficiary of AI cost savings, and its ecosystem will allow it to become more efficient, despite market concerns about spending.

Mike Cannon-Brookes Co-founder, Atlassian 19:59

Atlassian margins robust, AI costs manageable.

Atlassian's demand has never been higher, and margins will remain robust as the company has demonstrated the ability to deliver AI solutions while maintaining profitability, with AI costs being an unmanageable problem only if not properly handled.

Sonal Varma Chief India Economist, Nomura 36:00

Indian rupee poised for near-term strength.

The Indian rupee is set for near-term strength as lower oil prices improve the current account, the balance of payments has swung from a large deficit to a surplus, and substantial bond inflows from a new RBI scheme are expected, providing relative outperformance versus EM currencies despite a strong dollar.

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This Bloomberg Markets video, published July 01, 2026, features Anthony, Lorraine Tan, Mike Cannon-Brookes, Sonal Varma discussing EWY, EWT, SMH, TSM, 6857.T, American Silicon, IXJ, FXI, KBA, TCEHY, TEAM, INR. 12 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Anthony, Lorraine Tan, Mike Cannon-Brookes, Sonal Varma · Tickers: EWY, EWT, SMH, TSM, 6857.T, American Silicon, IXJ, FXI, KBA, TCEHY, TEAM, INR