00:00Our top story today, the AI trade revival on Wall Street proves to be short-lived as tech stocks in
00:06Asia under renewed selling pressure,
00:08investors in the region increasingly rotating out of tech and into other sectors as they reassess the outlook.
00:16Chip giant Samsung failed to impress investors even after its preliminary results showed a 19-fold surge in quarterly profit.
00:25The sell-off suggests that investors already priced in the solid earnings and are focused on the longer-term memory
00:32cycle trajectory.
00:33Let's get more from Ray Wong, founder and principal analyst at Constellation Research.
00:38It is a Silicon Valley-based advisory firm.
00:40Ray, good to have you with us.
00:41I mean, break down the numbers for us.
00:44Is there any reason for markets to be disappointed?
00:47The stocks are down 8%.
00:51You know, it's a great point.
00:53I mean, people are worried about the highs.
00:55Expectations have been pretty high along the way.
00:58But the overall demand for high bandwidth memory, the overall demand for DRAM is still there.
01:04We're talking about 18- to 24-month backlog.
01:07The supply is huge.
01:08You cannot do AI without memory.
01:09And especially on the high bandwidth memory and especially on the DRAM, you can't possibly miss this.
01:14I mean, the Kospi has been super volatile.
01:17If you look at Samsung stock, at one point it was up 165% for year-to-date.
01:21It's been a great run.
01:22And the expectations to have an 18x increase, I mean, at 56 billion, this is stellar numbers.
01:29I mean, this is one of the best years ever.
01:32The profit alone in 2026 exceeds the cumulative profit generated over the past 40 years since Samsung entered the semiconductor
01:40market, as one of their executives mentioned.
01:42This is huge, and we're going to continue to see this, but it's a question of do you take the
01:46profits at the top out?
01:48I mean, do you take the profits out now or do you wait for a drop?
01:51And I think the market has spoken, but it is a good time to jump back in.
01:55Well, the thing is, it's not just Samsung that's down today.
01:59Tech as a whole is down.
02:01I mean, you get a sense of that AI jitter, right, in the market.
02:04And what do you make of it?
02:08It's a good point.
02:10You don't know what a high is until you see the low.
02:12And I think that's what's spooking investors.
02:14They're afraid that this is the peak.
02:16And what we're seeing actually is something different on the other end.
02:20When we look at backlogs, when we look at revenue performance obligations, I mean, there's still a massive backlog.
02:27You're looking at $728 billion on the U.S. side, just among the hyperscalers.
02:32You're looking at sovereign AI about to pick up along the way.
02:35You're looking at chip demand for all types of devices that are happening.
02:38And so people are so scared because the boom and bust cycles of memory have been brutal over the past
02:4510 years, the past 20 years.
02:47And nobody wants to be caught on the back end of that trade.
02:50But the reality is the demand is real.
02:52We're seeing it all across the board.
02:54Even if there's a little bit doubt about where AI is headed, there is a massive demand.
02:58And I think that's what people continue to miss.
03:01But the other piece that's happening is a rotation.
03:04There is a good rotation out of tech into other areas, which bodes well for the rest of the economies.
03:10If you look at the Fortune 500, we've only seen 85% of the Fortune 500 are basically growing at
03:16single digits.
03:17And so we've got to see other growth in other areas.
03:20And I think you're starting to see the rotation play a role there.
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