Volatility but No Despair: HSBC Sees Semiconductor Sell-Off as Rotation Not Retraction

In the current global economic landscape, the semiconductor market has been a focal point of recent discussions. According to a recent analysis by HSBC, the sharp decline in stock prices for semiconductor manufacturers may be interpreted as a rotation rather than a broader retreat from the artificial intelligence (AI) theme. The report highlights that the performance of software companies has recently shown strong recovery, supporting this interpretation. Specifically, firms like Salesforce, Workday, and ServiceNow have exhibited positive signals, indicating a strategic shift towards titles less vulnerable to high earnings expectations rather than an overall abandonment of the AI theme. Additionally, HSBC sees potential for long-term growth in data centers expansion in Asia, indicating a structural demand that could support the semiconductor supply chain even amid short-term supply challenges. These perspectives reflect a more optimistic outlook on the American tech sector, maintaining overweights but with caution towards recent market volatility. The focus of the bank is on portfolio realignment, evaluating structural opportunities rather than fundamental changes to the global growth narrative.