Allianz: No sign of an AI bubble bursting in the short term; Federal Reserve expected to raise interest rates twice in the second half of the year

Glonghui, July 8｜Allianz Investment Managing Director and Asia Pacific Chief Equity Investment Officer Xue Yonghui believes that the supply and demand of semiconductors and memory remain tight, and there are no signs of an industry bubble bursting in the short term. However, investors should be cautious of increased volatility. In addition to chips, the AI supply chain also includes industries such as raw materials and power equipment, offering investors a wide range of options. The market is paying close attention to the impact of US interest rate trends on global stock markets. Xue Yonghui believes that the Federal Reserve is expected to raise interest rates twice in the second half of the year, which the market should be able to absorb, but if the number of rate hikes exceeds market expectations, it will have an impact on the stock market. In the first half of this year, Asian stock markets overall outperformed US stocks. Xue Yonghui points out that the Asian market is benefiting from diversified US dollar investments and believes it can become one of the core global investment options, as reforms have transformed the region’s story from cyclical to structural, and valuations are more attractive than those in the US.