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Sector observation and question without a clear directional trade or catalyst; no explicit position.
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I just read an article from the WSJ that in Asia from cab drivers to everyday investors people are pouring a lot into AI-related stocks these days. The most notable ones are companies like TSMC, SK Hynix, and Samsung.
The AI-related industry is currently in a growth stage, since insatiable demand for memory, for example, greatly outpaces supply. My guess is that a lot of this money is rotating in from areas like crypto and oil.
Technology-related sectors especially semiconductors are known to be cyclical. However, in 2022, NVIDIA’s approach to managing supply through targeted allocation may have changed the industry. Of course, this works for NVIDIA because it is widely considered to have a near-monopoly in the GPU segment. But a similar argument could be made for SK Hynix, Samsung, and Micron in the memory market.
So, with heightened demand that doesn’t look like it will be reduced anytime soon, when do you think the next “break” will be?