HSBC's Kettner Says `Melt-Up' Set to Boost Hyperscalers

Summary

HSBC strategist Max Kettner dismisses fears that equity offerings by large tech hyperscalers signal a bubble, arguing the current environment is less frothy than 2020-2021. He advocates rotating toward the median company and broadening market participation away from semiconductors, citing improving median earnings globally. He also challenges the hawkish Fed narrative and suggests US rates could fall, supporting equity multiples.

• Hyperscaler equity dilution fears are overblown; offering volumes align with 2020, not the 2021 SPAC bubble.
• Kettner sees strong AI margins (e.g., Micron) as justified, not a speculative top.
• Since late March, AI/semi stocks surged ~50% while the rest of the S&P 500 was flat.
• He favors a broadening trade: the median company is showing rising earnings growth and surprises in the US, Europe, Japan, and EM.
• The hawkish Fed narrative is overdone; US exceptionalism is now consensus, and rate declines could help equity multiples.