00:00 Speaker A
I showed a graph at the beginning of the show that shows how crowded the semiconductor trade is.
00:05 Speaker A
Is a chart like this the same as saying that all fund managers are concerned that the semi-half of expected returns at this point is overcrowded? Is that a concern?
00:15 Speaker B
But there’s nothing in particular. III would like to say more about the whole AI trade at the moment. You have to remember that this is a structural thing.
00:24 Speaker B
And there will be a natural rotation between hyperscalers and semiconductors. And I think it’s those great six that are worth keeping in mind.
00:36 Speaker B
These hyperscaler-related names were traditionally referred to as the Magnificent 7. Well, the ratings have actually gone down in the last six to eight months.
00:46 Speaker B
When everyone started talking about the AI bubble in November, many of these stocks came under pressure.
00:54 Speaker B
And in reality, we are moving from talking about bubbles to talking about bottlenecks.
00:58 Speaker B
Sure, the cycle may pause on its own, but we still think this AI trading is structural and things can restart on an uptrend.
01:07 Speaker B
I’m not saying the bubble has burst, but it’s definitely a good time to potentially re-enter some of these names.
01:13 Speaker B
And that revenue is what makes it so powerful. In addition to revenue forecasts, we also consider revenue trends over the past year or so.
01:23 Speaker B
So, moving away from the bubble narrative and the various pullback narratives that we’ve seen in the last six weeks or so around AI trading, we feel very confident.
01:34 Speaker B
The hard evidence of performance remains strong. Today we touched on ASML. TSMC came out earlier this week and Micron a few weeks ago.
01:43 Speaker B
So, of course, that’s going to be a big focus in the coming weeks as we get reports on hyperscalers and other semiconductors, but right now that’s more of our focus.
