It's not a game in Shanghai, Shenzhen, and here in Hong Kong, you're watching the Chinese show. I'm not about rulers with David English. Good morning.Let's get to your top stories today. Asian stocks rising with Korea leading these gains after a tech led rebound and strong economic numbers boosting Wall Street. Investors also weighing the latest Fed minutes with officials indicating a shift away from agreeing on further rate cuts.Putting the central bank on a collision course with President Trump. Also ahea ...

SHERY: SHERY: THIS IS "THE ASIA TRADE." THIS IS "THE ASIA TRADE." AVRIL: AVRIL: ASIAN STOCKS SET FOR GAINS ASIAN STOCKS SET FOR GAINS AZTEC DRIVES A WALL STREET AZTEC DRIVES A WALL STREET REBOUND WITH JITTERS AROUND A REBOUND WITH JITTERS AROUND A DISRUPTION EASING. DISRUPTION EASING. OIL CLIMBS ON U.S.-IRAN OIL CLIMBS ON U.S.-IRAN TENSIONS.TENSIONS. THE LATEST FED MINUTES SHOW A THE LATEST FED MINUTES SHOW A FED SHIFTING FURTHER AWAY FROM FED SHIFTING FURTHER AWAY FROM FURTHER RATE CUTS, PUTTING THE FURTHE ...

Core Insights - The market has overlooked significant developments in AI technology application, with many businesses still exploring how to implement these technologies effectively [2] - There is a notable disconnect between Wall Street's perception of AI's success and the actual challenges faced by companies in implementing AI solutions [4][5] - The costs associated with AI development are substantial, with companies currently operating at a loss while trying to establish their AI models [10][12] Group 1: AI Implementation and Market Perception - Companies face internal constraints and political challenges when implementing AI in the workplace, which complicates the process [1] - Investors are uncertain about the impact of rapidly advancing AI models from companies like Anthropic, Google, and OpenAI, leading to declines in software-focused ETFs [8][9] - The market has shown a tendency to misjudge the timeline and feasibility of AI's widespread adoption, as evidenced by historical trends in other industries [3] Group 2: Financial Performance and Investment Opportunities - Major tech companies like Microsoft, Amazon, and Tesla have seen stock declines due to the high costs of their AI initiatives, with year-to-date losses of -15%, -9.6%, and -6.13% respectively [7] - The SPDR S&P Software & Services ETF has fallen more than 17.9% year-to-date, while the iShares Expanded Tech-Software Sector ETF is down 20.1% [8] - South Korean companies Samsung and SK Hynix are positioned as key players in the AI-capable flash memory market, with significant production capabilities compared to U.S.-based Micron Technology [17][18] Group 3: Valuation and Market Dynamics - The "Korea Discount" affects the valuation of South Korean companies, which are seen as undervalued despite their importance in the AI sector [20][21] - Increased foreign investment is helping to improve the P/E ratios of South Korean firms, although the market still trades at a discount compared to U.S. equities [22][23] - Investing in South Korean ETFs, such as the Franklin FTSE South Korea ETF and iShares MSCI South Korea ETF, provides exposure to leading companies in the AI space while mitigating risks associated with direct stock purchases [24][25][26]

Market Overview - US stock futures retreated as fears of US-Iran conflict fueled a jump in oil prices, with S&P 500 and Nasdaq 100 futures falling about 0.3% [1] - Oil prices saw their biggest daily jump since October, with Brent crude rising above $71 per barrel and West Texas Intermediate near $66 [2] - Investors are analyzing the Federal Reserve's minutes from January's policy meeting, which indicated divisions over future rate hikes amid persistent inflation [3] Company Earnings - Walmart is set to report earnings, acting as a bellwether for the retail sector [4] - DoorDash reported fourth-quarter results that slightly missed Wall Street expectations, with earnings per share at $0.48 compared to the forecast of $0.55, but adjusted EBITDA rose 38% year over year to $780 million [7][8] - DoorDash's revenue grew 28% year over year to $3.96 billion, slightly below the nearly $4 billion expected, while total orders increased 32% to 903 million [8][9] - For Q1 2026, DoorDash expects marketplace GOV to be between $31.0 billion and $31.8 billion, exceeding the Street's forecast of $30.75 billion [10] Industry Developments - Samsung Electronics' stock surged to a record high as it negotiates a price for its latest AI memory chip, HBM4, which is expected to be priced around $700 per unit, up to 30% higher than the previous generation [4][5] - Samsung has started mass production of HBM4 chips and has shipped commercial products to customers, marking a comeback in the AI chip market [6]

>> LIVE FROM DUBAI. THIS IS BLOOMBERG DAYBREAK EUROPE. I’M JOUMANNA BERCETCHE WITH YOUR TOP STORIES.U.S. FUTURES SLIDE AHEAD OF WALL STREET’S ROPING TODAY. JOBS DATA SHOWS MORE COOL IN THE U.K. LABOR MARKET. GENEVA TAKES CENTER STAGE AS THE U.S. AND IRAN HOLD TALKS TO END THEIR LONG RUNNING NUCLEAR DISPUTES.AND ANOTHER ROUND OF DISCUSSIONS BETWEEN RUSSIA AND UKRAINE. WE’LL HEAR FROM THE CFO TO HAVE WORLD’S LARGEST MINER LATER THIS HOUR. IF YOU’RE JUST TUNING IN, WE ARE COMING OFF WHAT HAS BEEN A THINNER TRA ...

Core Viewpoint - Sandisk is positioned to capitalize on the growing demand for AI memory storage, potentially mirroring Nvidia's success in the AI sector [2][9]. Company Evolution - Sandisk has transitioned from a focus on flash drives to becoming a key player in AI data centers, similar to Nvidia's evolution in the GPU market [4][5]. - The company’s enterprise solid-state drives (SSD) and NAND flash memory are becoming essential components in hyperscaler data center infrastructures [5]. Market Dynamics - The total addressable market (TAM) for high-bandwidth memory (HBM) was estimated at $35 billion last year, with expectations of reaching $100 billion by 2028, growing at a compound annual growth rate of 40% [8]. - Sandisk's revenue of $9 billion indicates significant growth potential relative to the expanding AI memory market [9]. Competitive Landscape - The memory storage market is fragmented, with major players including Micron Technology, Samsung, and SK Hynix, positioning Sandisk to leverage its growth potential [7]. - Sandisk is seen as a "pick-and-shovel" opportunity in the AI infrastructure space, benefiting from the overall increase in capital expenditures by major tech companies [11][13]. Future Outlook - As AI workloads increase, the demand for memory storage solutions is expected to rise sharply, making Sandisk a compelling investment for growth [12][13]. - The company is anticipated to grow alongside its chip counterparts in the AI infrastructure era, suggesting a strong investment case [13].

Core Viewpoint - Micron Technology is positioned to benefit significantly from the ongoing AI boom, particularly in the memory sector, with potential for its share price to exceed $1,200 by August 2026 [1][3]. Industry Overview - The demand for memory, specifically RAM and DRAM, is critical for AI applications, and a shortage is expected to persist until 2028, leading to a projected 50% price increase for RAM by the end of Q1 2026 [2]. - Micron is one of only three major memory producers globally, alongside Samsung and SK Hynix, and is the sole major American producer of RAM and DRAM [6]. Company Performance - Micron's Q1 fiscal 2026 results showed revenue of $13.6 billion, a 57% year-over-year increase, with DRAM accounting for 79% of that revenue [7][8]. - The company achieved a gross margin of 45.3%, an operating margin of 31.8%, and a net margin of 28%, significantly exceeding earnings expectations by 20% [8]. - The projected earnings per share (EPS) for Q2 of fiscal 2026 is $8.49, nearly double the Q1 EPS of $4.78 [8]. Valuation Metrics - Micron's trailing-12-month price-to-earnings (P/E) ratio is 39.31, which is relatively low compared to other tech hardware companies like Nvidia [9]. - Based on the current P/E ratio and projected EPS for fiscal 2026, potential share prices could range from $1,190.30 to $1,424, indicating a possible 183% gain from current levels [10].

Core Insights - The artificial intelligence (AI) infrastructure market is experiencing significant growth, with five companies projected to spend a total of $700 billion on AI data centers in the current year, and spending expected to reach $1.4 trillion by 2030 according to Cathie Wood [1] Group 1: Key Companies in AI Infrastructure - Nvidia holds an estimated 90% market share of graphics processing units (GPUs), which are essential for AI workloads, positioning it as the dominant player in the AI infrastructure market [2] - Broadcom is emerging as a major competitor to Nvidia by developing custom AI application-specific integrated circuits (ASICs), which are more energy-efficient and cost-effective, and has partnered with Alphabet to create Tensor Processing Units (TPUs) [3][4] - Micron is one of the leading DRAM manufacturers, benefiting from the increasing demand for high-bandwidth memory (HBM) necessary for AI chips, leading to significant revenue growth and a favorable supply-demand dynamic in the DRAM market [5][6] - Taiwan Semiconductor Manufacturing Co. (TSMC) has a virtual monopoly on the manufacturing of advanced logic chips, including GPUs and AI ASICs, positioning it to benefit from the rising AI infrastructure spending [7]

Core Viewpoint - Asian markets, particularly South Korea and Japan, have significantly outperformed the U.S. equity market in 2026, with Goldman Sachs indicating that they have further potential for rallying [1]. Group 1: Market Performance - The S&P 500 index has seen a slight decline of 0.14% in 2026, contrasting sharply with the strong performance of certain Asian markets [1]. - South Korea's KOSPI index has been notably boosted by the surge in SK Hynix's stock, highlighting the strength of the technology sector in the region [1]. Group 2: Expert Insights - Tony Pasquariello, the global head of hedge-fund coverage at Goldman Sachs, describes the performance of Asian markets as "bangers," suggesting a positive outlook for continued growth [1].

Core Viewpoint - The South Korean KOSPI index has experienced significant growth, driven primarily by major companies like Samsung Electronics and SK Hynix, amid strong demand linked to AI technology [2][3][4]. Group 1: Market Performance - The KOSPI index rose 8% in the last week, marking its best week in five years, and has more than doubled since the end of 2024, with a year-to-date increase of 31% [3][4]. - SK Hynix's stock surged 35% and Samsung Electronics' stock increased by 51% this year, contributing significantly to the KOSPI's performance [4]. Group 2: Investment Outlook - Goldman Sachs' global head of hedge-fund coverage believes it is too early for investors to reduce their South Korean positions, maintaining an overweight stance and raising the KOSPI target to 6,400, indicating over 20% upside potential [4]. - Aggregate earnings growth is projected to be remarkably strong, with a forecast of 120% growth in 2026 following a 36% increase last year [4]. Group 3: Valuation and Positioning - The South Korean market is trading at attractive valuations, with a 12-month forward price-to-earnings multiple of 8.7 and a 24-month forward P/E ratio of 7.8, making it more appealing compared to other regional markets [5]. - Foreign ownership of the South Korean equity market is below the midpoint of the long-term range, with foreign institutional investors net selling $6 billion of South Korean stocks year-to-date [6]. Group 4: Future Catalysts - Retail-brokerage accounts hold record cash balances of around 100 trillion Korean won ($70 billion), indicating potential future buying activity [7]. - South Korea is making progress in improving corporate governance under the Value Up program, with additional catalysts expected in the coming quarters [7].