Tonight the U.S. stock market rebound: apart from short-covering by shorts after last week’s oversold rebound, it’s also because expectations for this week’s Google earnings have been priced in early.
Last week’s TSMC earnings were positive, especially with order volumes exceeding expectations and being locked in, which implies strong demand from upstream cloud players and a high likelihood that capital expenditures will be raised.
If we think it through in reverse: if we expect cloud players’ CapEx to rise, then demand for GPUs from downstream industries should be even stronger. And within GPUs, a key component is memory/storage. That’s why today the Hynix ADR led the entire storage sector higher.
I roughly mapped out the order of the AI industry chain:
Banks → Cloud providers (CapEx) → TSMC (orders) → Storage (profitability) → Equipment (capacity expansion). TSMC sits in the middle between cloud providers and storage; last week’s positive TSMC earnings effectively boosted the upstream and downstream of the industry chain.
Need to note: if the storage sector has already priced in expectations for Google’s earnings in advance, then after the market closes tomorrow early morning, when Google’s earnings results are released and the positives land—Sell the news. Also, after the short-term oversold rebound and short covering, tomorrow’s momentum may be relatively weaker. So it’s not the time to be fully optimistic yet #韩国散户杠杆持仓降至三个月低点
Key points to watch in tomorrow’s Google earnings: the most important is AI capital expenditures, followed by the growth of Google’s cloud business.
In terms of U.S. stock trends, the “final exam” for Q2 earnings hasn’t finished yet. The specific evaluation of the AI structural industry chain will cause capital to rotate among sectors. The index may not move much, but volatility for sectors and individual stocks will be amplified—be mindful of that!
Last week’s TSMC earnings were positive, especially with order volumes exceeding expectations and being locked in, which implies strong demand from upstream cloud players and a high likelihood that capital expenditures will be raised.
If we think it through in reverse: if we expect cloud players’ CapEx to rise, then demand for GPUs from downstream industries should be even stronger. And within GPUs, a key component is memory/storage. That’s why today the Hynix ADR led the entire storage sector higher.
I roughly mapped out the order of the AI industry chain:
Banks → Cloud providers (CapEx) → TSMC (orders) → Storage (profitability) → Equipment (capacity expansion). TSMC sits in the middle between cloud providers and storage; last week’s positive TSMC earnings effectively boosted the upstream and downstream of the industry chain.
Need to note: if the storage sector has already priced in expectations for Google’s earnings in advance, then after the market closes tomorrow early morning, when Google’s earnings results are released and the positives land—Sell the news. Also, after the short-term oversold rebound and short covering, tomorrow’s momentum may be relatively weaker. So it’s not the time to be fully optimistic yet #韩国散户杠杆持仓降至三个月低点
Key points to watch in tomorrow’s Google earnings: the most important is AI capital expenditures, followed by the growth of Google’s cloud business.
In terms of U.S. stock trends, the “final exam” for Q2 earnings hasn’t finished yet. The specific evaluation of the AI structural industry chain will cause capital to rotate among sectors. The index may not move much, but volatility for sectors and individual stocks will be amplified—be mindful of that!