The market is moving beyond the initial AI 'training' phase, which benefited large-cap hardware producers like Nvidia and TSMC. Investors are now focusing on the 'inference' stage, where AI is applied in daily life, driving demand for a broader range of components like CPUs and analog chips from smaller firms like MediaTek.
A clear divergence is emerging in Asian markets. Investors are treating India as a 'funding market' and pulling capital out of China due to regulatory crackdowns, while pouring funds into Taiwan and South Korea to gain exposure to the AI boom.
China is pursuing technological self-reliance, with Huawei reportedly developing semiconductor technology that could reduce dependence on Western EUV machines. Simultaneously, Beijing is cracking down on illicit cross-border trading to stem massive capital outflows, estimated at $1 trillion in the past year.
The Australian government's budget aims for fiscal responsibility by stabilizing the deficit and introducing productivity-enhancing reforms. However, it also includes a controversial expansion of the Capital Gains Tax (CGT) discount change, which could dampen sentiment in the property market and affect small business and venture capital investment.
U.S. military strikes in Iran, aimed at preventing the mining of the Strait of Hormuz, have introduced significant volatility into oil markets. Despite the immediate price drop, the ongoing tensions and stalled nuclear talks create a persistent risk of supply disruption for global energy.
Keep pulling the thread on United States.