No single ticker was named. Semiconductors ETFs are one way for retail investors to get exposure. Not a recommendation.
EM dominates the AI hardware supply chain
The guest highlighted that emerging markets, particularly Taiwan and Korea, are prime beneficiaries of the AI CapEx cycle due to their dominance in the upstream semiconductor and hardware supply chains.
The argument
With technology making up over 40% of the EM index, the guest argued that the safest way to play the AI build-out is upstream in 'picks and shovels' like leading foundries and memory makers. This is because downstream winners at the application layer remain highly difficult to predict during this frenetic CapEx phase.
The thesis, stress-tested
✓ What validates it
- ✓Hyperscalers maintaining or increasing their multi-billion dollar CapEx guidance
- ✓Continued profitability and revenue acceleration at the AI model and utility layers
▸ Risks discussed
- ▸A sudden deceleration or fading of CapEx by major US hyperscalers
- ▸Extreme performance dispersion and momentum dependency within the tech sector
Hear it yourself
"So those that have invested in EM have kinda been rewarded, but it seems like the war has kinda brought that to a standstill at least recently. And so I thought it would be good just to get your overall view on the emerging market landscape as you see it today. Yeah. Absolutely. I I think a lot of variables important variables to think about when you when you think about EM. It's not a sort of homogeneous set of countries or industries. But, yeah, I think to your point, EM started to perform over the last couple of years. I think it's important to remember that EM equities had been in the doldrums for a very long period of time since 2010."