Normalization of the Abnormal: Building a Global Investment Strategy Based on Supply and Demand

Summary

Choi Il-ho reviews the violent deleveraging in semiconductors, explains why the selling was supply-driven and should reverse, and highlights a potential rotation from AI infrastructure toward cash-rich hyperscalers as capex growth slows. Earnings, order backlogs, and free cash flow trajectories support a selective rebalancing watchlist.

• Retail panic and leveraged ETF unwinding drove semiconductor sell-off; forced selling appears done, and fundamentals will reassert.
• Strong hyperscaler results from Microsoft, Google, and Amazon show record order backlogs and improving cash flow dynamics.
• Capex growth is moderating; the market may soon shift focus from AI infrastructure spend to capital-efficient big tech winners.
• Philadelphia Semiconductor Index (SOX) is expected to recover on solid earnings and technical stabilization.
• A potential rotation from semiconductors to hyperscalers is being monitored; a clearer signal may emerge in one quarter.
• Sector performance shows energy leading, but the speaker warns against blind rotation and advocates selective stock picking.
• Rising 10-year yields and a possible September rate hike remain macro risks, though soft data still argues against tightening.