Source: Hong Kong Stock Code Following the 1-for-10 stock split, the stock price of the chip giant has skyrocketed. Wall Street seems to regard the concept of AI stocks split as a bullish news. Under the impetus of the AI wave, many AI semiconductor stocks have experienced considerable upward trend. After the split, the price per trading unit of 10-30 billion yuan products operating income was more affordable, allowing more retail investors to participate and adding fuel to the rise. Nvidia has already split its shares, and semiconductor stocks will also split in mid-July. Broadcom's Ethernet network conversion and AI accelerator for super large-scale customers are the main driving force for its AI revenue. The company expects this revenue to reach $11 billion in fiscal year 2024. Its second quarter performance ending on May 5, 2024, which was released not long ago, exceeded expectations, with a record quarterly revenue of $12.49 billion, of which related revenue from AI products reached $3.1 billion, accounting for 24.82% of its total revenue, close to Broadcom's AI product revenue target set for fiscal year 2024-25% of its total revenue. In the fiscal year 2023, the generative AI only accounted for 15% of Broadcom's semiconductor business revenue. Driven by this, the stock price of Broadcom has recently surged, with a cumulative increase of 62.17% since the beginning of this year. After less than five trading days since the release of the quarterly results on June 12, the stock price of Broadcom has increased by 20.53%. Myth of stock split is fulfilled. However, compared with Broadcom's approach of using stock split to reach a wider range of investors, wafer manufacturer with a stock price of $179.69 per share has been silently rising. Since the beginning of this year, TSMC has accumulated a rise of 74.03%, with a market value of US$ 931.9 billion, approaching trillion! Compared with Broadcom's market value of US$ 839.1 billion, it is higher by nearly 100 billion, and has surpassed the world's highest market value pharmaceutical company due to the concept of weight loss drugs, whose stock price has risen by 53.46% this year, and its market value has reached US$ 847.2 billion. What are the advantages of TSMC? If Nvidia's advantage is to seize the investment opportunity of generative AI, and become the builder of AI layout for major technology giants and sci-tech companies, then TSMC's advantage is even stronger than Nvidia's, because it is not only the foundry of Nvidia's most advanced AI chips, but also its main supplier and competitor. When customers place orders with the three major chip companies, these orders usually fall on TSMC, because TSMC has the most advanced process mass production capacity. Even though Intel is ambitiously developing the foundry industry, its capacity still lags behind TSMC. H100 needs to rely on TSMC's 5-nanometer capacity, and Nvidia's AI chip upgrade version H200/B100 uses TSMC's 4-nanometer and 3-nanometer process, making TSMC's capacity full at once. As shown in the figure below, TSMC's revenue has risen sharply in these two years. Although Intel's CEO Gelsinger, who has returned, is ambitiously trying to catch up with TSMC within four years by surpassing five nodes, but in terms of current technology and capacity, TSMC still has overwhelming advantages. Intel's challenge to Nvidia and the AI chip Gaudi 3 it released uses 5-nanometer technology, which obviously still needs to rely on TSMC's foundry. In addition, it is reported that TSMC recently won orders for Intel's upcoming notebook PC processor series 3-nanometer chips, and continues to dominate the three major chip companies. TSMC Chairman and CEO Wei Zhejia mentioned at the Q1 2024 earnings conference that as an important power for AI applications, TSMC will benefit from the strong demand for AI. He pointed out that almost all AI innovators are now cooperating with TSMC, and it is expected that revenue from AI accelerators will contribute to more than double this year, accounting for around 10% of its total annual revenue. He expects these revenues to grow at a compound annual growth rate of 50% in the next five years, and their share of total revenue will exceed 20% by 2028. Therefore, TSMC will be the biggest beneficiary in the AI development wave, and it is not limited to whether Nvidia is successful. The more competitive AMD, Intel, and Nvidia are, the less impact it will have on TSMC, because the more advanced the required production technology, the more TSMC can demonstrate its technical advantages.
Author: Mao Ting

During the "Golden Week", the A-share market was closed, while the Hong Kong stock market was open as usual on all working days except October 1st.

During the A-share market closure, the Hong Kong and Chinese concept stock markets performed strongly, significantly outperforming the prices of other global assets, demonstrating a positive market trend.

Factors affecting the performance of global assets during the holiday period

"Golden Week" period, there are many factors affecting the performance of global assets, the most prominent of which include the following major events:

1) Increasing geopolitical risks. Concerns over the interruption of Iranian crude oil supply and issues with the important Middle East shipping channels in the Strait of Hormuz have led to significant fluctuations in oil prices as tensions escalate.

WTI crude oil futures have risen by 9.21% since October, currently trading at $67.93 per barrel (as of the time of writing this article); Brent crude oil futures have also increased by 8.19%, currently trading at $77.68 per barrel.

In contrast, the price of gold, which has repeatedly refreshed its high position since the beginning of this year, has remained stable, mainly because the performance of the US job market has been better than expected, causing the expectations of interest rate cuts to cool down, the US dollar to strengthen, and the price of gold priced in US dollars to be relatively stable.

Looking at the London spot gold price of $2,647.89 per ounce, the cumulative increase during the 'Eleventh' holiday period is about 0.52%, while the cumulative increase so far this year has reached 28.38%.

2) US economic data.

The latest employment data shows that the US added 0.254 million new jobs in September, far higher than the revised value of 0.159 million in August and well above the expected 0.14 million. This is also the strongest job growth in six months, exceeding the average of 0.203 million new jobs per month over the previous 12 months. Average hourly earnings in the US non-farm private sector increased by 13 cents, or 0.4%, surpassing market expectations of 0.3%.

Furthermore, the US unemployment rate unexpectedly dropped from 4.2% the previous month to 4.1% in September, better than the expected 4.2%.

Due to controlled inflation, the Federal Reserve focuses more on employment data during its interest rate discussions, aiming to maximize employment while maintaining inflation at 2%. These data may indicate a strong US economy, and many market participants believe the US economy has already achieved.But after the bursting of the internet bubble and the Fed's rate cut in 2001, the ROI dropped by more than 10%.a decrease in the chance of the Federal Reserve cutting interest rates by 50 basis points in November.

As shown in the chart below, the probability of a 25 basis point interest rate cut by the Federal Reserve in November has increased from 65.3% a week ago to 96.5%, while the probability of the Federal Reserve keeping rates unchanged has risen from 0% last week to 3.5%.

Driven by US economic data,$USD (USDindex.FX)$Maintaining strength, see the chart below, the US dollar index remains above 102.5 level.

Driven by bullish economic data, the US stock market performed strongly on Friday (October 4), although the performance for the week was not very ideal. $Dow Jones Industrial Average (.DJI.US)$Please use your Futubull account to access the feature.$Nasdaq Composite Index (.IXIC.US)$And$S&P 500 Index (.SPX.US)$The accumulated changes during the National Day holiday (as of the close on October 4, 2024) were 0.05%, -0.28%, and -0.20% respectively.

In terms of individual stocks, among the Dow Jones components, the best performer since October is$Salesforce (CRM.US)$rose 5.13% cumulatively, followed by benefiting from the rise in oil prices,$Chevron (CVX.US)$rose 2.36% cumulatively; $IBM Corp (IBM.US)$ rose 2.23%.

Chinese concept stocks were the best performers among the components of the Nasdaq index. $Chanson International (CHSN.US)$ Phoenix Motor (PEV.US) has increased by 184.57% in total.$Phoenix Motor (PEV.US)$It has increased by 16.76% in oil and gas exploration companies.

The best-performing components of the S&P 500 are generally due to the increase in oil prices and are predominately energy stocks. $Vistra Energy (VST.US)$ The best-performing components of the S&P 500 are generally due to the increase in oil prices and are predominately energy stocks. $Diamondback Energy (FANG.US)$ up 12.88%, also has a resort in Macau $Wynn Resorts (WYNN.US)$ up 9.98%.

Other energy companies also performed well.$Marathon Oil (MRO.US)$,$ConocoPhillips (COP.US)$and$Constellation Energy (CEG.US)$N/A.$Apache (APA.US)$Energy infrastructure stocks $Williams (WMB.US)$N/A.$Devon Energy (DVN.US)$,$Schlumberger (SLB.US)$,$EOG Resources (EOG.US)$,$Occidental Petroleum (OXY.US)$The cumulative growth rate is all above 8%.

The AI concept remains hot, with the unlisted OpenAI receiving another $6.6 billion in financing, bringing its post-investment valuation to $157 billion. The heat in the primary market continues to spread to the secondary market, Huang Renxun reiterated, Blackwell is too hot to keep up with supply, AI chip stocks.$NVIDIA (NVDA.US)$During the "eleven" period, accumulated a 2.87% increase, while its main contract manufacturer of ai chips $Taiwan Semiconductor (TSM.US)$accumulated a 4.31% increase.

3) Outlook on Japan's economic policies.

Japan's newly appointed Prime Minister Shigeru Ishiba stated that, given the current economic situation, it may not be appropriate for Japan to further hike interest rates too quickly. Both other economic ministers and the Bank of Japan agree on the goal of ensuring the economy does not deflation. This may reduce the possibility of further interest rate hikes in Japan in the short term. The yen is weak against the US dollar, having briefly fallen below the 149 level, now reporting 148.40.

Boosted by this sentiment, Japanese stocks surged, accumulating a 3.98% increase during the "eleven" period, outperforming South Korea, India, and Singapore, as shown in the table below.

Among them, the best-performing in Japanese stocks is medical electronic platforms. $M3 (2413.JP)$ It has accumulated a 17.18% increase.$Inpex (1605.JP)$benefiting from the production of electric cars,$The Japan Steel Works (5631.JP)$(not to acquire American Steel, Nippon Iron), with accumulated increases of over 11%.

However, the best performers these past few days are Chinese stocks,$Hang Seng Index (800000.HK)$During the holiday period, it has accumulated an increase of over 7%.$Hang Seng TECH Index (800700.HK)$The cumulative increase is over 10%, reflecting the performance of Chinese concept stocks.$NASDAQ Golden Dragon China (.HXC.US)$While the cumulative increase is over 11%.

Future Outlook

Next, global asset pricing will continue to be influenced by the situation in the Middle East and U.S. economic data. However, it is important to note that the trend of Chinese assets after the holiday will also be closely watched.

Before the weekend, due to positive U.S. employment data, the US dollar exchange rate soared, dragging down the performance of other currencies. As the holiday approaches its end, the offshore renminbi is also starting to stabilize. The offshore renminbi exchange rate against the US dollar is stabilizing around 7.09. A series of bullish policies in China may attract more funds, and the performance of A-shares, Chinese stocks, and concept stocks after the holiday will attract global attention.

In the medium term, the U.S. presidential election in the second half of the year may impact the global capital trend.

Editor / jayden