The AI Cycle Will Turn This Year but First Things Get Even Crazier | Andreas Steno Larsen

Watch on YouTube ↗  |  May 25, 2026 at 15:04  |  1:08:48  |  Monetary Matters
Speakers
Andreas Steno Larsen — Founder, Steno Research

Summary

Andreas Steno Larsen argues inflation is back, driven by energy and AI semiconductor demand, pushing US yields above 5%. He expects the semiconductor cycle to peak later this year but sees a euphoric phase ahead. He favors US and India equities, energy, and specific semiconductor plays while warning against quantum stocks.

  • Inflation is driven by energy (Strait of Hormuz) and AI-related semiconductor supply constraints.
  • US 10-year Treasury yield expected to exceed 5%.
  • Macro portfolio overweight US and India; EM ex-India underperform.
  • Semiconductor cycle still in euphoric upturn, expected to roll over late 2025/early 2026.
  • Specific longs: SK hynix, Micron, Wolfspeed, Infineon, HP.
  • Avoid quantum computing names like Rigetti due to lack of earnings.
  • AI trade is a cause of inflation, not a victim; semis have pricing power.
  • Energy and AI semis are both inflationary forces to buy.
Trade Ideas
Andreas Steno Larsen Founder, Steno Research 14:09
US growth resilient, favored allocation.
US growth holds up substantially better than peers because the US is not on the receiving end of the supply shock from the Strait of Hormuz, and the strong dollar supports US assets.
SPY HIGH
Andreas Steno Larsen Founder, Steno Research 14:09
India growth accelerating, strong data.
India is the only EM with accelerating growth due to the removal of reciprocal tariffs and ability to buy Russian oil, making it a standout in a strong dollar environment.
INDA HIGH
Andreas Steno Larsen Founder, Steno Research 23:27
Buy energy as inflation driver.
Energy is a key driver of PPI inflation; buying energy benefits from that inflation because when the PPI rises, you need to buy the stuff that makes it go up.
XLE HIGH
Andreas Steno Larsen Founder, Steno Research 23:27
Semis benefit from AI inflation.
AI demand is causing PPI inflation; semiconductors have scarce supply relative to demand (near 100% GPU utilization) and full pricing power, making them beneficiaries of the inflation they create.
SMH HIGH
Andreas Steno Larsen Founder, Steno Research 28:26
Micron cheap on forward earnings.
Micron, peer to SK hynix, is also still cheap on forward PE and the speaker has been long the stock for a long while, continues to hold it.
MU MED
Andreas Steno Larsen Founder, Steno Research 28:26
SK hynix cheap on earnings momentum.
SK hynix, despite a dramatic price surge, is not particularly expensive on a forward price-to-earnings basis, and its momentum is backed by strong earnings, making it a worthwhile hold.
000660.KS MED
Andreas Steno Larsen Founder, Steno Research 30:39
Quantum lacks earnings, avoid.
Quantum computing names like Rigetti Computing have no earnings and no prospects of earnings for years, making them pure speculation and dangerous to buy.
RGTI HIGH
Andreas Steno Larsen Founder, Steno Research 34:47
Infineon gains from power semis.
Infineon in Germany is a great example of the power semiconductor space accelerating in the late cycle, as pricing power moves toward lower-margin semiconductor trades.
IFX.DE LOW
Andreas Steno Larsen Founder, Steno Research 34:47
Wolfspeed benefits from power pricing.
Wolfspeed has been the best semiconductor trade over the past month, benefiting from the late-cycle shift where lower-margin power semiconductor names accelerate.
WOLF MED
Andreas Steno Larsen Founder, Steno Research 46:12
HP benefits from semis scarcity.
HP has a strong supply chain and pricing power allowing it to pass on increased semiconductor costs to enterprise consumers, making it a beneficiary of the wafer cannibalization and scarcity in consumer electronics.
HPQ MED
Andreas Steno Larsen Founder, Steno Research 66:29
10-year yield to exceed 5%.
The US 10-year Treasury yield is likely to exceed 5% due to the inflation environment and the steepening yield curve driven by fiscal and foreign demand dynamics.
US10Y HIGH
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This Monetary Matters video, published May 25, 2026, features Andreas Steno Larsen discussing SPY, INDA, XLE, SMH, MU, 000660.KS, RGTI, IFX.DE, WOLF, HPQ, US10Y. 11 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Andreas Steno Larsen  · Tickers: SPY, INDA, XLE, SMH, MU, 000660.KS, RGTI, IFX.DE, WOLF, HPQ, US10Y