Guangfa Bank Hong Kong: Short-term Volatility Increases in AI Hardware Chain, But Fundamentals Remain Strong

BlockBeats News, June 16th. Guotai Junan Hong Kong stated that the global semiconductor sector has experienced a significant short-term increase, and investors' profit-taking may lead to faster rotation. However, AI infrastructure, rising storage prices, and demand for advanced packaging will continue to support the technology hardware market.

Analysts including Jeff Pu stated in the Overseas Technology Monthly Report released on June 16th that the Philadelphia Semiconductor Index's valuation has risen to about 32 times price/earnings ratio, facing short-term macroeconomic uncertainty and trading congestion pressure. Nevertheless, the fundamentals of semiconductors and AI remain robust, with healthy inventory levels, PC demand outperforming expectations, and recovering automotive and industrial demand.

The report mentioned that although new platforms like Blackwell have reduced the cost per token, agent tasks have led to higher token consumption, resulting in a continued increase in AI total costs. Guotai Junan Hong Kong believes that model companies such as OpenAI and Anthropic have strong Annual Recurring Revenue (ARR), with AI investment returns beginning to show, which will continue to support cloud capex.

Guotai Junan Hong Kong expects that the capital expenditure of the top five cloud service providers in the United States will reach $812 billion in 2026, an 82% increase year-on-year; rising to $1.053 trillion in 2027. The global AI accelerator market size is expected to increase from $359 billion in 2026 to $818 billion in 2028.

Storage remains one of the most favored themes in the report. Guotai Junan Hong Kong stated that NAND may outperform DRAM, with NAND integrated prices expected to increase by 25%-30% QoQ in the third quarter, DRAM contract prices rising by 15%-20%, and HBM pricing potentially experiencing greater elasticity by 2027.

Regarding optical communication, the bank believes that concerns about CPO and HVDC delays have been overblown. The report predicts that the demand for 800G and 1.6T optical modules will each reach approximately 80 million units in 2027, driven by GPU and ASIC cluster expansions from Nvidia, Google, AWS, and others.

Guotai Junan Hong Kong has added Intel, Credo, Micron, MediaTek, and Marvell to its preferred list while removing TSMC, AMD, Lumentum, EMC, and TI. Overall, the bank maintains a "constructive amid volatility" outlook on the overseas technology sector.