JPMorgan Asset Management’s global head of equities, Paul Quinsee, says semiconductor memory stocks may be on the cusp of a strong rebound after investors dumped the shares in the past few months over fears about the huge levels of spending on artificial intelligence.
Although AI giant Anthropic’s blockbuster initial public offering filing helped calm market jitters around AI financing and boosted the share prices of some of the world’s largest memory companies on Tuesday, South Korea’s Samsung and SK Hynix are still down more than 40 per cent from their June peaks.
On Wall Street, Nasdaq-listed Micron, Sandisk, Seagate and Western Digital have faced similar falls.
Quinsee, who helps oversee JPMorgan’s $US4.8 trillion ($6.8 trillion) in assets under management, said the sell-off in the chipmakers could mirror the price action of software stocks, which were sold off earlier this year in the so-called SaaSpocalypse before rebounding sharply.
Australian-based Atlassian’s shares dropped 60 per cent between January and April on the Nasdaq, but have since surged almost 300 per cent.
“Investors changing sentiment is going to create opportunities,” Quinsee told a JPMorgan media summit in Singapore on Tuesday.
“Three months ago, there was a great opportunity to invest in so-called AI losers, companies with a great track record that were being discounted by the market because there was a lot of fear that their business models wouldn’t survive the world of AI; since then, many of the stocks are up around 40 or 50 per cent.
“Right now, the memory semiconductor stocks are on sale. That could be another opportunity.”