Asian stocks plummet again, but Malaysian stocks are doing well.
As chip manufacturers like Nvidia fall, concerns about overvaluation of artificial intelligence (AI) are rising again, causing a sharp decline in Asian semiconductor stocks. However, market participants believe that the impact on local technology stocks is minimal.
Yi Feng (iFAST) research analyst Xu Kaisheng pointed out in an interview with Nanyang Business Daily that this is mainly because most of our technology stocks are not directly related to the AI theme.
"So, there is no impact on our technology stocks, or it is very small."
He added that in the first half of the year, the local performance of utilities, construction, and industrial stocks was relatively good.
Looking back, under the wave of AI, there has been strong global demand for new datacenters, which has boosted the aforementioned areas related to infrastructure.
Still observing local technology stocks.
He suggested that investors can currently choose to observe off-market, as local technology stocks are still relatively sluggish.
He stated that in the just-ended earnings season, companies like $INARI (0166.MY)$ performed relatively poorly.
Yi Feng (iFAST) research analyst Xu Kaisheng pointed out in an interview with Nanyang Business Daily that this is mainly because most of our technology stocks are not directly related to the AI theme.
"So, there is no impact on our technology stocks, or it is very small."
He added that in the first half of the year, the local performance of utilities, construction, and industrial stocks was relatively good.
Looking back, under the wave of AI, there has been strong global demand for new datacenters, which has boosted the aforementioned areas related to infrastructure.
Still observing local technology stocks.
He suggested that investors can currently choose to observe off-market, as local technology stocks are still relatively sluggish.
He stated that in the just-ended earnings season, companies like $INARI (0166.MY)$ performed relatively poorly.
Despite the continuous inflow of foreign capital in the past two weeks, he expressed that this makes the technology stocks relatively unattractive compared to the index component stocks, and he expected that the trend in September will continue to be under pressure.
Areca Capital's CEO Huang Deming analyzed that in the second quarter, technology stocks, especially semiconductor-related stocks, generally lagged behind the broader market, blaming the delay in semiconductor recovery compared to expectations.
Orders have not recovered.
"The main reason is that there are some delays in the supply chain, and customers may have placed orders, but the flow of orders has not yet returned due to the fact that more local technology stocks are engaged in the backend."
However, he added that if there is a recovery in profits in the third and fourth quarter, it will help to improve performance in the future.
Therefore, he believes that investors should pay attention to some companies with solid fundamentals and take advantage of the low prices.
Are AI stocks being killed in valuation?
The latest concern about global AI actually stems from some analysts' comments, some of whom believe that the valuation of AI-related stocks has far exceeded the level of profitability in practical terms.
The widely watched PMI index for US manufacturing was lower than expected, causing concerns about the US economy and further exacerbating risk aversion.
Randy, the head of UBS Global Asset Management Taiwan, said in an interview with Bloomberg TV, "Investors are now starting to question whether investment returns can be achieved because some macro data is not so strong, which makes the market a bit nervous."
On the other hand, some people remain optimistic about the prospects of AI, with several companies around the world planning to invest billions of dollars in adopting new technologies.
Fibonacci Asset Management's Global CEO, Zheng Renyun (transliteration), believes that concerns about the peak demand for AI are exaggerated.
It is very likely that we will see strong demand for artificial intelligence and the infrastructure that supports it in the first half of next year.
In addition, in Asia, valuation is not seen as a major concern because AI stocks have lagged behind some global technology giants.
According to Bloomberg data on Asian chip makers, the expected price-to-earnings ratio for these stocks is 13 times, lower than the 18 times earlier this year, and also lagging behind the level of nearly 24 times for major peers listed in the United States.
The stock market will be volatile in September.
Asian stocks slumped on Wednesday, with Taiwan, Japan, and South Korea leading the decline in major indexes, following the worst performance since August 5th in the US stock market.
Nvidia's overnight decline in US chip stocks, coupled with weak US manufacturing data and falling oil prices, has intensified concerns about the global economic situation.
$Nikkei 225 (.N225.JP)$ The global market was influenced by a sharp decline in the NVIDIA stock, causing a significant drop in the overall market. The Korean and Taiwanese stock markets also saw a significant decline, with the Taiwan Weighted Index plummeting by 4.5% and Taiwan Semiconductor following suit.
The latest concern about global AI actually stems from some analysts' comments, some of whom believe that the valuation of AI-related stocks has far exceeded the level of profitability in practical terms.
The widely watched PMI index for US manufacturing was lower than expected, causing concerns about the US economy and further exacerbating risk aversion.
Randy, the head of UBS Global Asset Management Taiwan, said in an interview with Bloomberg TV, "Investors are now starting to question whether investment returns can be achieved because some macro data is not so strong, which makes the market a bit nervous."
On the other hand, some people remain optimistic about the prospects of AI, with several companies around the world planning to invest billions of dollars in adopting new technologies.
Fibonacci Asset Management's Global CEO, Zheng Renyun (transliteration), believes that concerns about the peak demand for AI are exaggerated.
It is very likely that we will see strong demand for artificial intelligence and the infrastructure that supports it in the first half of next year.
In addition, in Asia, valuation is not seen as a major concern because AI stocks have lagged behind some global technology giants.
According to Bloomberg data on Asian chip makers, the expected price-to-earnings ratio for these stocks is 13 times, lower than the 18 times earlier this year, and also lagging behind the level of nearly 24 times for major peers listed in the United States.
The stock market will be volatile in September.
Asian stocks slumped on Wednesday, with Taiwan, Japan, and South Korea leading the decline in major indexes, following the worst performance since August 5th in the US stock market.
Nvidia's overnight decline in US chip stocks, coupled with weak US manufacturing data and falling oil prices, has intensified concerns about the global economic situation.
$Nikkei 225 (.N225.JP)$ The global market was influenced by a sharp decline in the NVIDIA stock, causing a significant drop in the overall market. The Korean and Taiwanese stock markets also saw a significant decline, with the Taiwan Weighted Index plummeting by 4.5% and Taiwan Semiconductor following suit.
$FTSE Bursa Malaysia KLCI Index (.KLSE.MY)$ Although it followed the overall market decline, the decline in the Taiwan Weighted Index was relatively mild, with the closing price at 1670.24, down 6.41 points or 0.38%.
Xu Kaisheng believes that the recent general decline in the market is only a temporary factor and not the beginning of a downward cycle.
In terms of the global market, $NVIDIA (NVDA.US)$ NASDAQ led the decline in the US stock market, but mainly due to high stock valuations. This can be considered a healthy correction.
He further pointed out that Malaysia's stock market had not performed as well as other Asian stock markets, and the decline in the Composite Index was relatively mild, mainly driven by stable financial stocks.
However, based on the historical trend of the stock market in September, he expects significant volatility this month.
The market is particularly concerned about this month's Federal Reserve meeting. If the results do not meet expectations, there may be greater volatility.
In addition to the Federal Reserve, Huang Deming also pointed out that the US presidential election is also a subject of attention. Therefore, it is expected that the impact of investment sentiment will continue, and the trend in the next 1-2 months will fluctuate.
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[Interviewer] Yang Huiping
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Source of Information: Nanyang Commercial News
Disclaimer: This content is for reference and educational purposes only and does not constitute any specific investment, investment strategy, or endorsement. Readers should assume all risks and responsibilities resulting from relying on this content. Before making any investment decisions, please conduct your own independent research and evaluation, and consult professionals if necessary. The author and related contributors are not responsible for any losses or damages caused by the use or reliance on the information contained in this article.
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