After a strong lead in the first half of the year, global technology stocks have entered a wave of obvious correction since August, coupled with the hawkish attitude of the Federal Reserve, so that technology stocks with huge capital moats are now inevitably facing the pressure of revaluation. However, the stock price correction is one thing, but the demand for related orders driven by AI is quite solid, so after the stock price correction in this wave, it may be able to meet another wave of technology stocks**.
Source**: Goldman Sachs, as of March 31, 2023. **Source**: Bloomberg, Intelligence, International Data Corporation, as of June 5, 2023. **Source**:p Recedence Research, compiled by J.P. Morgan Asset Management, as of February 19, 2023. The above data are estimates of different institutions and do not represent actual data in the future.
The global chip foundry revenue is still expected
Although AI stocks have taken the lead in the correction since early September, the revenue growth rate of semiconductors, a key industry that is crucial to the improvement of AI computing power, is expected to be 25% and 13% in 2024 and 2025, respectively, indicating that the demand for semiconductors driven by AI will remain strong in the future.
Global foundry revenue is expected to grow by 25% in 2023
Source**: Goldman Sachs, as of March 31, 2023, in $1.0 billion.
There is a strong demand for orders and capital investment behind AI
It's not a bubble
Many investors will think that the technology stocks** led by AI stocks in the past are just a flash in the pan and may even be an industrial bubble because of the recent correction in technology stocks. However, according to IDC, the generative AI market will reach 1$3 trillion, with a compound annual growth rate of 42%, and the industry's share of overall technology spending will reach 12%.It can be seen that there is a solid capital investment and application demand behind AI, and it is not a bubble.
Estimated revenue of the generative AI industry and the proportion of industry in technology spending
Source**: Goldman Sachs, as of March 31, 2023, in $1.0 billion.
It is necessary to convert the use of technology into profits
It must rely on high-end manufacturing
Even if there is technological innovation in any technology industry, it still needs to rely on the input of the terminal manufacturing industry to convert demand into profits. Even though geopolitics has led to a restructuring of the global manufacturing industry, butAsia is still the center of the global manufacturing industry, China, Japan, Taiwan, South Korea all have their own advantages, especially the global demand for industrial automation, will help enhance the status of Asia's high-end manufacturing in the field of science and technology.
The global industrial automation market size is estimated
**Source**:p Recedence Research, compiled by J.P. Morgan Asset Management, as of February 19, 2023.