$Invesco QQQ Trust(QQQ.US)

The semiconductor sector remains strong.

Yesterday, the Fed was hawkish. Warsh emphasized the 2% inflation target, insisting on not providing forward guidance, and the market is trading on the 'Higher for Longer' theme.

Today, the market's answer is that a hawkish Fed has little impact on AI semiconductors.

The market continues to maintain its previous divergence: the semiconductor, memory (DRAM), interconnect (AVGO, MRVL, ALAB, CRDO), and CPU (INTC, ARM, AMD) sectors continue to attract capital; the energy sector led the decline, while companies in the optical module, software, and sectors under high capital expenditure pressure performed averagely.

Why? Because the market is re-learning that high interest rates don't affect all growth stocks equally.

If your growth depends on future interest rate cut expectations, then 'Higher for Longer' is a negative.

If your growth comes from GPU orders, HBM shortages, ASIC volume ramps, data center interconnect upgrades, and sustained growth in corporate AI capital expenditure, then interest rates are just the denominator, while earnings and cash flow are the numerator.

The market has discovered that the numerator for AI infrastructure is growing faster than the pressure from the denominator.

Therefore, the more hawkish the Fed is, the more capital is willing to concentrate on AI infrastructure companies that have real orders, cash flow, and CapEx certainty.

It's not yet time for a full bull market, but I believe the future bull market will last longer. Other sectors will also look to catch up, and companies performing averagely now will also rise in the future. That's a healthy bull market. Currently, it's still a structural bull market. Companies with real orders, cash flow, and capital returns will become stronger amidst the volatility.