Technology trading shows “fatigue”, top analysts explain: AI fundamentals have not collapsed; this round of pullback is only emotional disturbance

The Zhitong Finance App learned that Gene Munster, a top technology analyst and co-founder of Shenshui Asset Management, said that although the fundamental indicators of the AI infrastructure cycle are positive, technology transactions have shown “fatigue.” In an interview, Munster stressed that the recent market pullback was mainly driven by psychological factors rather than deterioration in fundamentals. He pointed out that investors are just waiting to see if the upcoming financial report can deliver impressive results, which in turn will push the stock price upward.

The huge shock in the market stemmed from market sentiment rather than weakening fundamentals

Currently, the chip stock market has fluctuated sharply, and the overall market sentiment is very weak. “Stock god” Warren Buffett issued a warning on Wednesday. Currently, AI-themed speculation is rampant in the market, and there are few targets with real value. This statement caused market sentiment to take a sharp turn. The US semiconductor sector was sold off. Micron Technology (MU.US) and SanDisk (SNDK.US) fell 8%, and Intel (INTC.US) fell more than 4%.

Negative sentiment spread overnight to the Asia-Pacific market. On Thursday, Asian chip stocks collectively plummeted. Among them, SK Hynix's Korean stock once plummeted by more than 11%, and Samsung Electronics' stock price fell more than 8%.

In response to the wave of SpaceX (SPCX.US) sell-off, Munster made it clear that this decline had nothing to do with the company's long-term potential. According to reports, this Wednesday, SpaceX temporarily fell below the IPO issuance price of 135 US dollars in the intraday market, the first time since it went public. SpaceX's stock price once reached an all-time high of $225.64, which briefly surpassed Silicon Valley giants Microsoft and Amazon in market capitalization.

“There was no negative catalyst in the market,” he said, adding that the overall decline in the AI infrastructure sector was about 4%, which did not indicate new negative news.

He explained, “Essentially, it's just that the popularity of this wave of trading has subsided.” The problem is at the level of market sentiment rather than weakening fundamentals.

AI infrastructure construction has just begun

Even with the current correction in the market, Munster is still optimistic about the long-term prospects of the AI cycle.

“I still think AI infrastructure construction has just begun, and the application aspect or physical artificial intelligence hasn't even really started yet,” he said.

According to Munster, the industry signals recently released by IBM (IBM.US) are of positive significance. They not only confirm the long-term boom in AI infrastructure construction, but also fully demonstrate the transformative power of AI to reshape the software industry.

According to reports, IBM announced preliminary results for the second quarter this Tuesday. As both revenue and profit fell short of market expectations, the company's stock price plummeted by about 24% in the intraday period. CEO Arvind Krishna admits that the quarter's results were “disappointing”, mainly because many large-scale transactions were not completed as planned, while customer capital expenditure was shifting to infrastructure such as servers, storage, and memory chips, which dragged down IBM's software and infrastructure business performance.

On the hardware side, Munster highlighted the increase in ASML.US (ASML.US) revenue growth, which accelerated from 11% in the previous quarter to 21%.

At the same time, he has high expectations for the new iOS beta version launched by Apple (AAPL.US), saying it is “the birth moment of personalized AI” and will open up huge room for growth in the consumer market.

Munster admits that the feature is currently running slower and consumes more power, but “this system makes me feel like I just got a brand new phone.”

Looking ahead to the future market, Munster pointed out that two core variables will determine the next trend in the AI sector: next year's capital expenditure scale and cloud business growth data.

Wall Street institutions generally forecast a 23% year-on-year increase in industry capital expenditure, while Munster judged that the actual growth rate “may reach 37% or more.” This statement shows that despite short-term market weakness, he is still firmly optimistic about the fundamentals of this sector.

According to reports, Munster has long been optimistic about Nvidia (NVDA.US). At the end of last year, at a time when the market was worried about the slowdown in Nvidia's performance growth and the cooling of AI transactions, Munster publicly stated that Nvidia's boom period would continue for at least two more years. He said at the time, “I think we are still in the early stages of artificial intelligence construction, and Nvidia's position is still unshakable. The company's growth over the next few years is higher than investors expected.”