--- title: "HSBC: AI Boom Remains Intact Despite Semiconductor Volatility" type: "News" locale: "en" url: "https://longbridge.com/en/news/294480167.md" description: "HSBC maintains that the AI investment cycle remains intact despite recent semiconductor stock volatility, viewing the pullback as a rotation rather than capitulation. The bank projects global AI capex to exceed $1 trillion by 2028, with Asia becoming the data center epicenter. HSBC favors Asia's AI infrastructure value chain and China's advanced manufacturing sectors. Additionally, it holds a constructive outlook on risk assets, citing resilient US economic growth and stable Fed rates." datetime: "2026-07-31T08:36:45.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294480167.md) - [en](https://longbridge.com/en/news/294480167.md) - [zh-HK](https://longbridge.com/zh-HK/news/294480167.md) --- # HSBC: AI Boom Remains Intact Despite Semiconductor Volatility **The recent sell-off in Asian semiconductor stocks should not be mistaken for the end of the artificial intelligence investment cycle. Instead, it reflects investors reassessing lofty earnings expectations, according to HSBC Private Bank.** «The current pullback in semiconductor and memory stocks is more of a rotation than capitulation,» **Patrick Ho**, Chief Investment Officer for North Asia at HSBC Private Bank and Premier Wealth, said in a market update released on Friday. While soaring memory prices have driven sharp profit growth for manufacturers, investors are increasingly questioning whether future earnings can continue to justify elevated valuations. South Korean equities, in particular, have experienced heightened volatility, with domestic retail investors buying while foreign investors have been reducing exposure. At the same time, regulators have tightened leverage rules to curb speculative trading. **Asia at the Centre of the AI Build-Out** Despite the recent market turbulence, HSBC maintains that the long-term investment case for artificial intelligence remains firmly intact. The bank expects global AI capital expenditure to increase from less than USD 400 billion in 2025 to more than USD 1 trillion by 2028, underpinning demand across the entire AI ecosystem. Asia, in particular, is expected to become the epicentre of the global data centre expansion, with regional capacity projected to more than double by 2030, eventually accounting for around 40 percent of worldwide capacity. This growth is expected to benefit a wide range of industries, including semiconductor manufacturers, semiconductor equipment suppliers, server producers, cooling technology providers, power generation companies, energy storage firms and commodity suppliers. HSBC therefore continues to favour companies positioned across the broader AI infrastructure value chain through its high-conviction investment theme focused on Asia's data centre boom. **China's AI Race Accelerates** The bank also highlighted China's rapidly evolving AI landscape, arguing that the country's large language model ecosystem could represent a market worth more than USD 150 billion by 2030. Chinese AI developers are becoming increasingly competitive as foundation models narrow the performance gap with leading international systems while offering significantly lower costs. At the same time, providers are increasingly shifting from subsidised AI services towards commercial business models such as Model-as-a-Service (MaaS). Beyond artificial intelligence, HSBC also sees attractive opportunities in China's advanced manufacturing sector, particularly electric vehicles, autonomous driving technologies, energy storage and biotechnology. According to Ho, these sectors demonstrate China's scale advantages and support the bank's continued preference for the country's technology and manufacturing leaders. **Fed Outlook Supports Risk Assets** HSBC also reiterated its constructive outlook for global financial markets following the US Federal Reserve's decision to leave interest rates unchanged for a fifth consecutive meeting. Although the decision exposed divisions within the Federal Open Market Committee, with a 9-3 vote, the bank continues to expect policy rates to remain in a 3,50 to 3,75 percent range throughout both 2026 and 2027. «We maintain a mild overweight on US equities, supported by resilient economic growth, broadening earnings and continued AI leadership,» Ho said. In fixed income, HSBC continues to favour high-quality investment-grade corporate bonds, while remaining positive on the US dollar thanks to resilient economic fundamentals and relatively attractive interest rate differentials. 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