The anticipated capital influx from SpaceX, Anthropic PBC, and OpenAI is set to invigorate technology spending, particularly benefiting Asian hardware firms involved in server parts and power equipment. This development could act as a catalyst for the next phase of a historic stock market rally in Asia.
Asian hardware companies have already reaped significant benefits from the data-centre expansion, with chipmakers like Taiwan Semiconductor Manufacturing Co., Samsung Electronics Co., and SK Hynix Inc. joining the trillion-dollar valuation club. However, as valuations soar, some investors are shifting focus to electronic component makers, anticipating a new wave of market champions.
The potential $70 billion in AI spending from the upcoming IPOs of SpaceX, OpenAI, and Anthropic, on top of the $750 billion already committed by hyperscalers, is expected to further fuel this trend. The impact is evident in recent earnings reports from chipmakers, indicating a broadening of the AI trade beyond traditional players.
“AI IPOs could further fuel the capex boom at a time when Asian chip stocks look stretched.”
Ken Wong, Asian equity portfolio specialist at Eastspring Investments Hong Kong Ltd.
Investors are increasingly aware of supply chain bottlenecks, prompting a shift in focus towards companies where earnings are just beginning to reflect AI infrastructure investments. Opportunities are emerging in firms like Taiwan's Hon Hai Precision Industry Co. and Quanta Computer Inc., which are involved in server assembly.
The power supply sector is also gaining attention, with nuclear and alternative energy sources becoming crucial as data centres proliferate. Companies like HD Hyundai Energy Solutions Co. and Daewoo Engineering & Construction Co. are among the top performers in South Korea, while Adani Group's green-powered data centres are driving gains in India.
“The flow-through to Asia is prominently visible in the latest chipmaker earnings reports.”
Fabien Yip, market analyst at IG International
Background
The AI sector has been experiencing rapid growth, with significant investments in infrastructure and technology. This has led to increased demand for semiconductor components and power supply solutions, driving stock market gains in Asia.
The next phase of AI investment could present both opportunities and risks. While the capital influx from SpaceX, OpenAI, and Anthropic is a positive signal for AI stocks, there is caution that if AI demand does not meet expectations, it could lead to excess infrastructure and valuation declines.
