[Saturday, September (month 9) 26 US Market Update] Hopes for easing geopolitical risks! Is Meta AI opening new horizons?
- What to look for
- You can examine why semiconductor stocks outperformed during the rebound driven by hopes for Middle East negotiations, and the context in which the Kansas City Fed president raised concerns about entities becoming too big to fail.
- Why it matters
- This helps you learn to distinguish differences in vulnerability between large hyperscalers and debt-financed third-party (3) data centers, as well as memory supply variables such as the timing of CXMT's capacity expansion.
AI summary
The presenter assesses that in September (month 9) on day 26 US stocks rebounded on expectations of progress in Middle East negotiations and a recovery in Saudi Arabia's crude oil exports. Interest rates also declined somewhat but remained high, so semiconductor stocks were stronger than small and mid-cap stocks. While Meta's AI services and large cloud contracts are stimulating investment, the presenter raises the possibility that data center expansion could spread risks to the financial system, prompted by the Kansas City Fed president's concerns about entities becoming “too big to fail.” He believes that third-party (3) operators that borrow to build data centers to lease to others may be more vulnerable to slowing demand and declining margins than large hyperscalers with strong cash-generating capacity. Korean memory companies may benefit from continued AI investment during 2027~2028 but if China's CXMT expands commodity DRAM capacity from late 2028 through 2029 and drives prices down, it will be necessary to check whether this also affects the profitability of HBM and high-performance DRAM. His view is therefore that, alongside current GPU rental demand, data center operations, and related companies' ability to raise funds, future commodity DRAM supply and its price gap with high-performance memory should also be tracked.