Author of this article: Li Xiaoyin Source: The wave of hard AIAI is in the ascendant, among which Asian stocks related to AI have performed well. As Asian AI stocks continue to rise, discussions on their future trends have become increasingly heated. On July 2, HSBC analysts Hera

Author of this article: Li Xiaoyin

Source: Hard ai

The AI ​​wave is in the ascendant, among which Asian stocks related to AI have performed well. As Asian AI stocks continue to rise, discussions on their future trends have become increasingly heated.

report mentioned that the concept of artificial intelligence is different from other "market stories" in that it has a clear starting point: the release of chatgpt. The subsequent AI wave gradually spread from the US stock market to the Asian market, which is why Asian AI stocks have grown at an alarming rate this time.

Taiwan stocks may be most affected by AI

HSBC emphasized in the report that it is still optimistic about AI stocks. The Asian AI stock index compiled by the bank has risen by 231% since November 2022, showing its strong upward momentum.

Since the beginning of 2023, the Taiwan stock market has risen by 70%, with TSMC rising by 110%.

But the report also added that although there are currently no clear signs that demand and returns for Asian AI stocks have peaked, risks are accumulating.

According to factset data, analysts have given a "buy" rating to 88% of Asian AI stocks. Among them, about 15% of the stocks have had their target prices raised, which is lower than the 21% ratio at the beginning of the year.

In terms of regions, HSBC maintains its underweight position on Taiwanese AI stocks, believing that the region is most affected by AI.. Although the Korean stock market also has greater risk exposure, it maintains an overweight position on the country's AI stocks.

Four types of factors may drive the correction

By analyzing historical experience, HSBC found that the reason for the correction of this type of market that relies on the rise of "big stories" is often driven by the following four types of factors. These risks are also worthy of the current Asian AI stocks. alert.

First, growth is weak. means that market demand cannot support growth expectations.

For example, after the 2008 Beijing Winter Olympics, the stock prices of footwear manufacturers such as Li Ning fell due to falling demand.

Second, market competition has intensified and supervision has tightened. Take Amazon as an example. Its stock price fell from US$4.3 in 1998 to US$0.3 in the third quarter of 2001, a drop of more than 90%. The reason was due to market rumors that the company was about to go bankrupt due to loss of competition. The

report also pointed out that the introduction of new regulations to curb monopolistic behavior may also lead to a decline in the growth of the entire industry.

For example, in June this year, subject to the EU’s antitrust regulations and regulatory framework, Apple announced that it would postpone the launch of its Apple Intelligence in corresponding regions.

The third is the expected retracement of growth. The report believes that companies that "tell stories" are often priced rather than valued. That is, how much the company's stock price can rise depends entirely on how much the market thinks it can rise. The

report stated that the previous peak price-earnings ratio of "Big Story" companies was between 21 times and 82 times.

At present, the high forward price-to-earnings ratio of Chinese Internet stocks is 40 times, Asian AI stocks are 16 times, TSMC is 21 times, and Aspeed is 72 times. is basically still lower than the peak level of the previous "big story" market, which means There is still room for the stock price to rise.

Finally, it is the company's own risk. The report stated that this problem has not yet appeared in the field of Asian AI stocks, but it still needs to be vigilant. The

report also adds that bond yields also play a role and are not expected to rise sharply from current levels, so the trajectory of Asian AI stocks may be different - their price-to-earnings ratios may shrink less than before.