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EnglishپارسیEnglishپارسیImportance: High ★★★
Shares of U.S. technology company IBM fell 23.9% to $220.95 on Tuesday, July 14, 2026, after its preliminary second-quarter results missed expectations. Workday dropped 6.9% to $134.81, while ServiceNow declined 6.0% to $104.62 in the latest available intraday trading.
IBM projected revenue of $17.2 billion, below the $17.86 billion forecast, and adjusted earnings of $2.93 per share, versus the expected $3.02. The company said customers redirected spending from software toward servers, storage and memory amid supply constraints and expected hardware price increases.
Possible Market Effect: The shift is bearish for software and IT-services stocks. Hardware and memory suppliers may benefit initially, although possible duplicate orders and rising data-centre costs create risks for the wider AI sector.
Market Condition and Sentiment:
Q: Why did IBM and other software stocks fall on July 14?
A: IBM’s earnings warning suggested that corporate AI spending is moving from software toward physical infrastructure.
Source: IBM, Reuters and live market data.
Importance: Medium ★★
China’s smartphone shipments fell 4.3% year over year to about 66 million units in Q2 2026, marking a fifth consecutive quarterly decline as higher memory and component costs weakened demand.
U.S. technology company Apple and Chinese technology company Huawei were the only major vendors to grow. Apple’s shipments increased 24.4%, lifting its market share from 13.9% to 18.1%, while Huawei grew 19.4% and remained the market leader with a 22.6% share.
Both companies maintained relatively stable prices while competitors raised prices or reduced lower-cost models. Xiaomi shipments fell 21.7%, while OPPO and Vivo declined 9.7% and 11.4%, respectively.
Possible Market Effect: Apple and Huawei may continue gaining market share, while elevated memory costs could pressure the margins and sales volumes of lower-priced Android manufacturers.
Market Condition and Sentiment:
Q: Which smartphone companies recorded shipment growth in China in Q2 2026?
A: Apple and Huawei were the only major manufacturers to record year-over-year growth.
Q: Which company led China’s smartphone market in Q2 2026?
A: Huawei remained first with a 22.6% market share, followed by Apple at 18.1%.
Source: IDC Quarterly Mobile Phone Tracker and Reuters.
IBM (NYSE:IBM), the U.S. technology and enterprise software company, saw its shares fall 22% on Tuesday morning after preliminary second-quarter results missed Wall Street expectations and raised concerns about a sudden shift in enterprise IT spending.
IBM reported Q2 revenue of $17.2 billion, below the analyst consensus of $17.86 billion. Total revenue increased only 1% year-on-year, supported by 5% growth in Software and flat Consulting revenue, while the Infrastructure division fell 7%.
The main pressure came from a sharp reprioritization of enterprise capital expenditure toward hardware. IBM said clients redirected spending in the final weeks of June toward servers, storage, and memory, as AI demand tightened supply of HBM and advanced DRAM and pushed buyers to secure hardware before expected price increases.
Because corporate IT budgets are limited, the hardware rush hurt IBM’s higher-margin software and mainframe-related businesses. Transaction Processing software and the Z mainframe cycle were pressured as clients delayed software expansions to fund immediate hardware needs. Cybersecurity-related distractions also delayed procurement decisions during the quarter.
Profitability weakened as well. Operating non-GAAP EPS reached $2.93, up 5% year-on-year, but missed the $3.02 consensus. GAAP diluted EPS fell 2% to $2.27. GAAP gross margin declined 100 basis points to 57.7%, while operating non-GAAP gross margin slipped 70 basis points to 59.4%.
Still, IBM showed resilience in parts of the business. Red Hat revenue grew 11%, Distributed Infrastructure surged 37% year-on-year, and first-half free cash flow reached $4.8 billion. The z17 mainframe program also remained strong at nearly 130% of the prior z16 program pace.
Importance level: High
Possible market effect:
The report is negative for IBM (NYSE: IBM) because the revenue miss, margin pressure, and 22% share decline show a clear loss of investor confidence. The data also signals that the AI boom may be benefiting hardware suppliers more than traditional enterprise software vendors in the short term. IBM’s market sentiment is bearish, and the stock does not look buyable yet unless it stabilizes after the selloff and confirms that software demand is recovering. For now, IBM looks more suitable for neutral-to-sell positioning, while aggressive buying would be high risk before price stabilization.
Q: Why did U.S. IBM shares fall 22% on Tuesday morning?
A: IBM shares fell because second-quarter revenue missed expectations, margins weakened, and investors reacted negatively to the shift in enterprise IT budgets away from higher-margin software and toward hardware.
Q: Did IBM miss second-quarter revenue expectations?
A: Yes. IBM reported $17.2 billion in Q2 revenue, below the analyst consensus of $17.86 billion.
Q: What caused IBM’s second-quarter revenue miss?
A: IBM said clients redirected capex toward servers, storage, and memory because AI-driven demand created supply constraints and expected price increases in memory markets.
Q: Is IBM stock buyable after the second-quarter preliminary results?
A: The current sentiment is bearish. IBM is not clearly buyable yet; investors may need to wait for price stabilization, better software momentum, and clearer margin recovery.
Source: IBM preliminary second-quarter results.
Importance: High ★★★
Wall Street ended lower on Monday, July 13, 2026, as semiconductor losses and renewed U.S.-Iran tensions weakened risk appetite.
Final closing levels were:
Technology was the weakest S&P 500 sector, while energy stocks gained as crude prices surged. The Philadelphia Semiconductor Index dropped about 4.8%, and U.S.-listed SK Hynix shares fell 9.3% after Friday’s strong debut.
Possible Market Effect: Semiconductor volatility and higher energy prices could keep the Nasdaq under pressure. Attention now turns to U.S. inflation data, Federal Reserve signals, and major bank earnings.
Market Condition and Sentiment:
Q: Where did the S&P 500 close on July 13, 2026?
A: The S&P 500 closed 0.79% lower at 7,515.34.
Q: Which major U.S. index recorded the largest decline?
A: The Nasdaq Composite fell the most, losing 1.55%.
Source: Reuters, Associated Press and The Wall Street Journal.
Gjensidige Forsikring, the Norwegian insurance company, saw its shares rise more than 3% on Monday after reporting stronger-than-expected second-quarter profit, supported by improved margins and strong cost control.
Profit before tax expense reached NOK 2.79 billion, above the average analyst estimate of NOK 2.56 billion compiled by Gjensidige from 12 estimates. The figure was above consensus, although based on the stated numbers, it remained below the highest forecast of NOK 2.96 billion.
The insurance service result for general insurance came in at NOK 2.38 billion, beating the consensus average of NOK 2.12 billion. The combined ratio improved to 78.9%, better than the expected 81.2% and already below the company’s 2026 target of under 82%.
The result included a negative NOK 419.3 million impact related to a Danish Supreme Court ruling on the workers’ compensation scheme. Excluding this one-off hit, Gjensidige said the insurance service result increased significantly year-on-year, driven by revenue growth, better margins, and strong cost discipline.
General insurance revenue was NOK 11.26 billion, broadly in line with the consensus estimate of NOK 11.24 billion. Profit after tax from continuing operations was NOK 2.12 billion, above the expected NOK 1.95 billion, while EPS came in at NOK 4.18, compared with NOK 4.42 a year earlier.
Importance level: Medium
Possible market effect:
The report is positive for Gjensidige Forsikring because profit, insurance service result, and combined ratio all beat expectations. The market reaction was bullish, with shares rising more than 3%. However, the one-off Danish court-related charge, higher large losses, and weaker EPS compared with last year may limit aggressive upside. Overall sentiment is bullish-to-neutral. The stock looks buyable on pullbacks or after confirmation of continued margin strength, while chasing after the initial rally may carry higher short-term risk.
Q: Why did Norwegian insurer Gjensidige shares rise on Monday?
A: Gjensidige shares rose because the company reported second-quarter pretax profit above analyst expectations, with stronger margins and better cost control.
Q: Did Gjensidige beat second-quarter profit expectations?
A: Yes. Gjensidige reported profit before tax expense of NOK 2.79 billion, above the average analyst estimate of NOK 2.56 billion.
Q: Is Gjensidige stock buyable after the second-quarter report?
A: The sentiment is bullish-to-neutral. The report supports the stock, but selective buying on pullbacks or after confirmation of margin strength looks safer than chasing the rally.
Source: Gjensidige's second-quarter earnings statement and company-compiled analyst consensus.
Importance: High ★★★
Global semiconductor stocks fell sharply on Monday, July 13, 2026, after South Korean chipmaker SK Hynix plunged 15.4% following its recent Nasdaq debut. Losses in SK Hynix and Samsung Electronics pushed the KOSPI down 8.95%, triggering a temporary 20-minute trading halt.
In early European trading, Dutch chipmakers ASML and ASM International fell about 1.6% and 2%, respectively. German chipmaker Infineon declined around 2.3%, while French-Italian company STMicroelectronics lost approximately 1.1%.
The selloff deepened on Wall Street. At the latest Monday quotes:
The Philadelphia Semiconductor Index dropped approximately 4.8%, while the Nasdaq declined 1.55%.
Possible Market Effect:
The global decline signals increasing concern about expensive AI valuations and whether memory-chip earnings can sustain recent growth. ASML and TSMC earnings will be important tests for the broader semiconductor outlook.
Market Condition and Sentiment:
Q: What triggered the global semiconductor selloff on July 13?
A: SK Hynix’s record decline, profit-taking after strong AI-related gains, and concerns about future memory-chip earnings triggered selling across Asia, Europe and the United States.
Q: Which U.S. chip stock recorded the largest decline?
A: SanDisk fell approximately 12.67%, recording the sharpest decline among the listed U.S. companies.
Q: What could stabilize semiconductor stocks?
A: Strong earnings and guidance from ASML, TSMC and other major chip companies could restore confidence.
Source: Reuters, MarketWatch, Barron’s and market data.
Importance: High ★★★
Shares of South Korean chipmaker SK Hynix closed 15.4% lower at 1,845,000 won on Monday, July 13, 2026, marking their steepest one-day decline in nearly two decades. The selloff helped push the KOSPI down about 9% and triggered a temporary 20-minute trading halt.
Sentiment weakened after Korea Investment & Securities estimated second-quarter operating profit at 60.4 trillion won, around 8% below the 65 trillion won market consensus. Investors also took profits following the company’s $26.5 billion U.S. listing and questioned whether HBM and AI-driven earnings growth could sustain current expectations.
SK Hynix’s ADRs had gained about 12.8% to $168 in their Friday Nasdaq debut but fell 7.9% to $154.70 in early Monday U.S. trading.
Possible Market Effect:
The sharp correction may keep Asian semiconductor shares volatile. However, continued AI-memory demand could support SK Hynix once earnings expectations and valuations reset.
Market Condition and Sentiment:
Q: How much did SK Hynix shares fall on July 13, 2026?
A: The shares closed 15.4% lower at 1,845,000 won.
Q: Why did SK Hynix shares fall despite the successful Nasdaq debut?
A: Profit-taking, weaker-than-consensus earnings expectations, limited HBM4 shipment growth and rebalancing between Korean shares and U.S. ADRs pressured the stock.
Q: Does the decline mean AI-memory demand has collapsed?
A: No. Demand remains strong, but investors are becoming more sensitive to valuation, earnings growth and future supply risks.
Source: Reuters and Korea Investment & Securities.
Asian markets finished mixed on Monday, July 13, 2026, as renewed U.S.-Iran tensions and concerns about AI-chip valuations triggered a severe technology selloff in South Korea.
South Korea’s شاخص کاسپی closed 8.95% lower at 6,806.93, after a circuit breaker temporarily halted trading. SK Hynix plunged 15.4% to 1,845,000 won, while Samsung Electronics dropped 10.7% to 254,500 won.
Japan’s Nikkei 225 fell 1.92% to 67,242.73, while the broader TOPIX declined 0.71% to around 4,007.
Mainland Chinese stocks also weakened. The Shanghai Composite lost 2.06% to 3,913.79, while the CSI 300 fell 1.79% to 4,695.38.
Other regional markets were more resilient:
Possible Market Effect:
The sharp Korean selloff may keep Asian semiconductor shares under pressure in the short term. Taiwan and U.S. chip earnings will be important in determining whether the decline becomes a broader AI-sector correction.
Market Condition and Sentiment:
Q: How much did South Korea’s KOSPI fall on July 13, 2026?
A: The KOSPI closed 8.95% lower at 6,806.93.
Q: Which major Asian chip stock recorded the largest decline?
A: SK Hynix fell 15.4%, while Samsung Electronics declined 10.7%.
Q: Did all Asian markets close lower?
A: No. Hong Kong, Australia, Singapore and India finished slightly higher despite the broader risk-off environment.
Source: Reuters, MarketWatch, Nikkei Indexes, Investing.com and regional exchange data.
Importance: High ★★★
The U.S. second-quarter 2026 earnings season accelerates this week, with major banks providing the first important test of corporate profitability amid the Iran conflict, higher energy prices and renewed inflation concerns.
On Tuesday, July 14, U.S. banks JPMorgan Chase, Bank of America, Goldman Sachs, Wells Fargo and Citigroup will publish their results. Investors will focus on net interest income, trading revenue, loan growth, credit quality and management guidance.
On Wednesday, July 15, U.S. financial groups Morgan Stanley and BNY, U.S. healthcare company Johnson & Johnson, and Dutch chip-equipment company ASML will report.
On Thursday, July 16, attention shifts to Taiwanese chipmaker TSMC, U.S. companies UnitedHealth Group and GE Aerospace, and streaming company Netflix. TSMC and ASML will be closely watched for evidence that AI-related semiconductor demand remains strong.
Wall Street currently expects S&P 500 earnings per share to rise approximately 22.5% year over year in the second quarter, but elevated expectations leave companies vulnerable to sharp declines if guidance disappoints.
Possible Market Effect:
Strong bank results and resilient corporate guidance could support U.S. equities. Weak credit trends, rising costs or cautious outlooks would increase concerns that geopolitical disruption and higher energy prices are beginning to pressure profits.
Market Condition and Sentiment:
Q: Which companies begin the major U.S. earnings week on July 14?
A: JPMorgan Chase, Bank of America, Goldman Sachs, Wells Fargo and Citigroup will report on Tuesday.
Q: Which semiconductor results are most important this week?
A: ASML reports Wednesday and TSMC reports Thursday, providing important signals about AI-chip demand and semiconductor capital spending.
Q: What is the main market risk during the earnings season?
A: Companies may report solid historical results but issue weaker guidance because of higher energy costs, inflation, geopolitical disruption or softer demand.
Source: Company investor-relations announcements, FactSet and Axios.
Importance: High ★★★
U.S. stock index futures extended their decline during early trading on Monday, July 13, 2026, as renewed military exchanges between the United States and Iran increased oil prices, revived inflation concerns and kept investors cautious ahead of a major week of second-quarter corporate earnings.
In the latest available delayed futures snapshot:
The updated readings show a deeper decline than the earlier session snapshot, particularly for technology-heavy Nasdaq 100 Futures, which had previously been down about 0.5%.
Risk sentiment weakened after the United States and Iran exchanged further strikes over the weekend. U.S. Central Command announced additional attacks against Iranian military targets, while Iranian outlets reported retaliatory missile and drone operations against U.S. bases and vessels in the region.
Conflicting statements over the Strait of Hormuz added to market uncertainty. Tehran said the strategic waterway remained closed, while U.S. officials disputed that claim and said commercial ships continued to transit the route.
Oil prices rose more than 4% as traders assessed the possibility of disruptions to a waterway that normally carries approximately one-fifth of global oil supplies. Brent crude climbed 4.1% to $79.11 per barrel, while U.S. West Texas Intermediate crude rose 4.1% to $74.37 per barrel.
Higher oil prices could increase fuel, transportation and production costs, adding to inflationary pressure. That risk may limit the Federal Reserve’s ability to lower interest rates and could keep bond yields elevated, creating an additional headwind for equities—especially highly valued technology and growth stocks.
Investors are also preparing for a heavy schedule of second-quarter earnings. The market will focus on whether strong corporate profit growth can offset geopolitical uncertainty, rising energy costs and higher-for-longer interest-rate expectations.
Possible Market Effect:
The immediate bias for U.S. equities remains cautious to bearish while oil prices, bond yields and geopolitical uncertainty remain elevated.
The Nasdaq 100 is more vulnerable because higher yields reduce the present value of expected future earnings for growth companies. The Dow may remain relatively more resilient because of its greater exposure to financial, industrial and defensive companies.
A confirmed reopening of the Strait of Hormuz, lower oil prices or signs of diplomatic progress could support a futures recovery. Further attacks on commercial vessels, U.S. forces or energy infrastructure would likely increase selling pressure.
Market Condition and Sentiment:
Q: What were the updated U.S. stock-futures levels on Monday, July 13, 2026?
A: S&P 500 Futures traded near 7,590.00, Nasdaq 100 Futures near 29,763.25, and Dow Jones Futures near 52,732.00.
Q: Which U.S. stock-index future recorded the largest decline?
A: Nasdaq 100 Futures recorded the sharpest loss, falling approximately 0.90%.
Q: Why are U.S. stock futures falling?
A: Renewed U.S.-Iranian attacks, higher oil prices, inflation concerns and uncertainty before major second-quarter earnings are weighing on sentiment.
Q: Why are higher oil prices negative for technology stocks?
A: Higher oil prices can increase inflation and keep interest rates and bond yields elevated, which generally places greater valuation pressure on growth and technology companies.
Source: Reuters, Investing.com futures data and regional market reports.
Importance: High ★★★
The expansion of U.S. chipmaker Nvidia’s customer base beyond traditional hyperscale cloud companies is becoming a central investment theme for the third quarter of 2026, according to Morgan Stanley.
Following meetings with Nvidia’s senior management, Morgan Stanley reiterated the company as its top semiconductor pick, maintaining an Overweight rating and a $288 price target. The bank said management remained confident that revenue growth could continue accelerating even as quarterly sales move toward the $100 billion level.
The key element of the investment thesis is that Nvidia’s growth is becoming less dependent on a small group of hyperscalers. Demand is increasingly coming from AI laboratories, enterprise customers, specialized “neocloud” providers, national sovereign-AI projects and industrial users.
This broader customer mix could reduce one of the market’s principal concerns: that Nvidia’s growth depends excessively on continued capital spending by a small number of major cloud providers such as Microsoft, Amazon, Alphabet and Meta.
Sovereign and Enterprise AI Become New Growth Engines
Morgan Stanley said sovereign-AI infrastructure, proprietary enterprise AI and industrial applications could become increasingly important as governments and companies build domestic or privately controlled computing capacity.
Nvidia’s recent projects support that argument. The company has announced national and industrial AI infrastructure initiatives serving governments, telecommunications companies, manufacturers, enterprises and research organizations. In South Korea, for example, planned deployments extend beyond cloud computing into manufacturing, robotics, autonomous vehicles and sovereign AI services.
The Nvidia Vera Rubin platform also combines GPUs with Vera CPUs, networking, storage and other infrastructure components. Nvidia says the integrated system can deliver substantially higher inference efficiency and lower cost per AI token, strengthening its competitive position against separately developed custom accelerators.
Networking and CPUs Broaden Nvidia’s Revenue Opportunity
Morgan Stanley also identified networking products and CPUs as increasingly meaningful growth drivers.
This is important because Nvidia is no longer selling only graphics processors. Its AI infrastructure includes complete rack-scale systems, CPUs, Ethernet and InfiniBand networking, data-processing units, software and related services.
The expansion into complete systems means Nvidia can capture a larger share of each AI data-centre project. It may also make it more difficult for customers to replace Nvidia GPUs with custom chips without losing access to the company’s broader hardware, networking and software ecosystem.
Nvidia has also opened parts of its interconnection technology to custom-chip developers through NVLink Fusion. This could allow Nvidia to benefit even when customers combine its networking and systems with third-party or internally designed processors.
Custom Chips Remain a Competitive Risk
The main challenge to Morgan Stanley’s bullish thesis is growing adoption of custom AI accelerators developed by hyperscalers and semiconductor companies.
Major technology groups are investing in proprietary processors to reduce dependence on Nvidia, control costs and optimize workloads. However, Morgan Stanley believes Nvidia continues to dominate the overall AI-computing market because its complete systems often provide a lower cost per generated token and greater flexibility across training and inference workloads.
The competition is therefore shifting from the performance of individual chips toward the economics of the entire AI factory—including computing, memory, networking, electricity consumption, software and utilization rates.
Nvidia Stock Remains Volatile Despite Strong AI Demand
Nvidia shares have experienced significant swings during 2026 as investors balance continued AI infrastructure demand against export restrictions, elevated expectations, custom-chip competition and concerns about the durability of hyperscaler capital expenditure.
The stock closed the latest trading session at approximately $210.96, gaining around 4% during the session. Morgan Stanley’s $288 target remains materially above that level, although the target should be viewed as an analyst forecast rather than a guaranteed valuation outcome.
The broader semiconductor sector has also faced periodic selling when even strong earnings failed to meet increasingly demanding expectations. Investors are therefore paying closer attention to whether AI spending produces sustainable revenue and cash flow rather than simply focusing on capital-expenditure announcements.
Possible Market Effect:
Morgan Stanley’s report is positive for Nvidia and the broader AI semiconductor ecosystem because it suggests the next growth phase could extend beyond the major U.S. cloud providers.
Diversification into sovereign AI, enterprise deployments, industrial computing, networking and CPUs could make Nvidia’s revenue growth more resilient. It may also reduce the risk that a slowdown in spending by one or two hyperscalers causes a sharp decline in total demand.
However, Nvidia’s valuation and elevated market expectations mean strong execution is already necessary. Any evidence of delayed AI projects, weaker hyperscaler spending, faster adoption of custom processors or slower revenue acceleration could produce sharp price corrections.
Market Condition and Sentiment:
Q: Why does Morgan Stanley remain bullish on Nvidia in the third quarter of 2026?
A: Morgan Stanley believes Nvidia’s demand is expanding beyond traditional hyperscalers to enterprises, AI laboratories, neocloud providers, sovereign-AI projects and industrial customers.
Q: What rating and price target does Morgan Stanley have for Nvidia?
A: The bank maintains an Overweight rating and a $288 price target, while continuing to identify Nvidia as its top semiconductor pick.
Q: Why is Nvidia’s broader customer base important for investors?
A: It reduces dependence on a small number of large cloud companies and creates additional revenue opportunities in government, enterprise and industrial AI infrastructure.
Q: Are networking and CPUs becoming important for Nvidia?
A: Yes. Networking, CPUs and complete rack-scale AI systems allow Nvidia to capture more revenue from each deployment and reinforce its full-platform competitive advantage.
Q: Do custom AI chips threaten Nvidia’s market position?
A: They remain an important competitive risk, particularly among large hyperscalers. Morgan Stanley nevertheless believes Nvidia’s integrated systems, software and cost per AI token support its dominant position.
Q: Is Nvidia stock currently buyable?
A: The medium-term outlook remains bullish, but elevated expectations and high volatility favour buying on controlled pullbacks rather than chasing sharp rallies.
Source: Morgan Stanley, Nvidia and market data.
Importance: High ★★★
Asian technology stocks are expected to remain one of the region’s principal market drivers during the third quarter of 2026, although investors are becoming more selective as elevated valuations, uneven earnings and uncertainty over returns from massive artificial-intelligence spending increase volatility across the sector.
Bernstein continues to identify semiconductors as its preferred Asian technology theme, supported by a strong earnings-upgrade cycle. However, the brokerage warned that investors should prioritize companies with sustainable earnings momentum instead of buying every expensive stock associated with AI.
Its preferred AI-infrastructure names include Taiwanese companies Taiwan Semiconductor Manufacturing Company (TSMC) and MediaTek, alongside South Korean chipmakers SK Hynix and Samsung Electronics. Bernstein maintains Outperform ratings on these companies, reflecting continued demand for AI processors, advanced memory and high-bandwidth memory chips.
Monday’s trading on July 13, 2026, demonstrated the sector’s widening performance gap. South Korea’s KOSPI fell by approximately 3% at one stage, with SK Hynix dropping sharply after its strong Nasdaq debut. Japan’s Nikkei 225 declined by around 1%, while Taiwan’s benchmark gained approximately 1% and Hong Kong’s Hang Seng advanced by about 0.5%.
Reuters reported that SK Hynix shares fell as much as 8.2% in Seoul amid profit-taking and concerns that HBM4 shipment growth had not met elevated expectations. The decline followed a 12.8% gain in the South Korean company’s U.S. depositary receipts during their Nasdaq debut.
Despite the subsequent share-price decline, demand for SK Hynix’s U.S. offering was more than seven times the number of available shares, highlighting continued institutional appetite for companies positioned at the centre of the AI memory-chip supply chain.
Investor caution increased after South Korean company Samsung Electronics estimated a 19-fold increase in second-quarter operating profit but still suffered a sharp share-price decline. The reaction suggested that strong current earnings were no longer sufficient to reassure investors about the durability of AI infrastructure spending and future memory-chip profitability.
Regional Semiconductor Outlook
South Korea:
AI memory remains the main earnings catalyst. SK Hynix retains a leading position in high-bandwidth memory used in AI processors, while Samsung Electronics is expected to benefit from rising demand for both advanced and conventional memory. However, extreme expectations and major capital-spending commitments increase the risk of sharp corrections.
Taiwan:
Taiwan remains Bernstein’s preferred regional AI ecosystem. TSMC benefits from its central role in manufacturing advanced AI processors, while MediaTek offers exposure to premium smartphones, edge AI and advanced consumer-electronics chips.
Japan:
Bernstein remains constructive on selected Apple supply-chain and electronic-component companies exposed to premium devices and AI-enabled smartphones. It is more cautious about Japanese memory producer Kioxia because of tougher memory-market dynamics.
China:
The brokerage remains selective, preferring technology companies with stronger earnings visibility and more reasonable valuations rather than broad exposure to the Chinese technology sector.
Possible Market Effect:
Semiconductor stocks can continue outperforming other Asian technology subsectors if earnings forecasts rise and hyperscalers maintain their AI capital-expenditure plans. However, the market is shifting from a broad AI rally toward a company-specific earnings environment.
This means firms with strong order visibility, technological leadership and pricing power may continue to attract capital, while highly valued companies without clear profit growth face a greater risk of sharp sell-offs.
Market Condition and Sentiment:
Q: Which Asian technology subsector does Bernstein prefer for the third quarter of 2026?
A: Bernstein prefers semiconductors because earnings forecasts remain supportive despite elevated valuations.
Q: Which Asian AI stocks are Bernstein’s preferred companies?
A: Its preferred companies include Taiwanese TSMC and MediaTek and South Korean SK Hynix and Samsung Electronics.
Q: Why did South Korean technology stocks fall sharply on July 13, 2026?
A: Profit-taking in SK Hynix, concerns about HBM4 shipment growth and broader doubts about the sustainability of AI-related earnings placed pressure on the KOSPI.
Q: Why are investors becoming more selective about Asian AI stocks?
A: Valuations are high, earnings performance is uneven and investors are questioning whether large AI infrastructure investments will produce sufficient long-term returns.
Q: Are Asian semiconductor stocks still buyable?
A: Yes, but selectively. Companies with strong earnings visibility, durable AI demand, technological leadership and pricing power offer better risk-adjusted opportunities than broadly buying all AI-related stocks.
Source: Bernstein Asia Technology Strategy, Reuters and regional market data.