Nomura research report reveals the ebbing of the "AI growth panic"! Earnings delivery and capital flows resonate in relay, with the AI computing power theme leading the tech stock counteroffensive.

Nomura research report reveals the ebbing of the "AI growth panic"! Earnings delivery and capital flows resonate in relay, with the AI computing power theme leading the tech stock counteroffensive. A latest research report released by Nomura cross-asset strategist Charlie McElligott shows that the AI trading theme is emerging from the previous round of AI computing power and technology growth panic, which had been amplified by concerns related to surging AI financing costs, overly crowded positioning, and the accelerated deleveraging process of hedge funds. This top Wall Street strategist from Nomura emphasized that the absorption of large-scale AI financing, the broadly strong results delivered by semiconductor giants and the two major cloud computing giants, and the disclosure in Anthropic's listing filing jointly alleviated the two-week "AI growth panic," while the clearing out of crowded positions and excessive leverage also created conditions for market repair. The absorption of large-scale financing, the strong results delivered by semiconductor giants closely related to the AI computing power infrastructure process and the two major cloud computing leaders Microsoft Corporation and Alphabet, together with Anthropic's updated listing filing, led the market to reassess the previous pessimistic inference that "rising funding costs would inevitably cause AI expansion to stall." At the statistical point of this Nomura strategist's report, Nasdaq-related volatility had fallen significantly for three consecutive trading days; the long-short portfolio of "long AI infrastructure beneficiaries, short hyperscale cloud vendors," although still down 11% month-to-date, had rebounded 8% over the past weekNomura said this also highlighted that capital was beginning to recognize again the profitability of upstream suppliers and to repair valuations that had been depressed by the concentrated wave of deleveraging and de-crowding. Meta's equity financing, Broadcom Inc.'s and SpaceX's related equipment financing answered "who will pay for computing power expansion," and the subsequently announced Microsoft Corporation Azure growth of 48% and Alphabet Inc. Class C cloud growth of 103%, together with SK Hynix's strong earnings, verified the commercialization realization of AI demand. With the pullback in tech stock volatility and the narrowing of credit spreads for some AI companies, the market began to reassess growth prospects under financing pressure, and the AI computing power theme thus gained dual support from capital absorption and earnings growth, further strengthening the narrative of a tech stock counteroffensive led by semiconductors. Pressure eases after AI trade "cleanse"! Nomura releases signal that "two-week AI growth and credit panic" is over Nomura cross-asset strategist Charlie McElligott said that after a brutal two-week major selloff, global equity markets finally breathed a sigh of relief: a wave of financing in the global technology sector, the far-better-than-expected results of those semiconductor leaders focused on AI computing power infrastructure, and Anthropic's fully updated S-1 listing filing jointly broke the previously pessimistic narrative hanging over risk assets that "the investment logic for AI computing power infrastructure has completely collapsed." This easing of pressure was particularly evident in the derivatives trading business. Over the past three trading days, volatility in Nasdaq-related assets was "substantially suppressed" from what McElligott described as last week's "extremely taut" levels; at the same time, the previously battered trade of "long AI infrastructure beneficiary companies, short hyperscale cloud vendors," although still down 11% month-to-date, had strongly bottomed and rebounded by about 8% in the past week alone. This shift occurred as earnings from hyperscale cloud vendors such as Alphabet (GOOG.US) (GOOGL.US), Microsoft Corporation (MSFT.US), and Amazon.com, Inc. (AMZN.US), as well as results from semiconductor giants such as Samsung, Intel Corporation (INTC.US), and AMD (AMD.US), were becoming the market's focus. Currently, Microsoft Corporation and Alphabet, as well as last week's Facebook parent Meta, have all strongly demonstrated in their reported results that the monetization path for AI applications led by AI agents is becoming clearer and that AI-related revenue data is becoming stronger. McElligott wrote in a note to clients that the initial public offering (IPO) filing submitted on Monday by Anthropic (ANT.US), the global super leader in AI applications, "played an extremely important role" in restoring market confidence in the expansion of demand for AI computing power infrastructure and the economics of AI commercialization. The capital market is also reinforcing this investment logic. McElligott noted that Meta's equity offering, ultimately totaling US$98 billion, saw its first tranche absorbed by the market; Broadcom Inc. reached a US$63 billion chip deal with Anthropic; and SpaceX and Apollo Asset Management reached a US$40 billion equipment financing lease transaction. Overnight, SK Hynix, the world's largest memory chip leader, reported extremely strong quarterly resultsrevenue up 328% year-over-year, operating margin reaching 80%, and management announcing that the company's capacity was "sold out through 2029"driving its shares up by double digits. The strategist viewed the recent drawdown in momentum trades and the liquidation of hedge fund pods as the natural result of crowded positioning. He noted that multi-strategy funds remain the primary destination for asset allocators, but high leverage and "persistent crowding risk" will trigger periodic cleanses. "This too shall pass," McElligott wrote. "And then, the change in performance delivery will play an important positive role, flushing excessive positioning and leverage out of the system." From "who pays" to renewed capital absorption: AI financing pressure sees substantive easing One of the most critical changes in this rebound is that the capital market has begun to provide executable funding arrangements for AI expansion. For example, McElligott cited the absorption of the first tranche of Meta's planned equity financing totaling about US$98 billion, the US$63 billion chip financing arranged by Broadcom Inc. for Anthropic, and the US$40 billion equipment financing lease between SpaceX and Apollo. The three respectively eased the pressure on companies to raise all construction funds at once through equity, asset financing, and lease support. Among them, the Broadcom Inc. transaction purchases AI accelerators and networking equipment through a special purpose vehicle (SPV) and then leases them to Anthropic, with deliveries expected to begin in 2027; its most direct positive significance for the semiconductor and AI computing power supply chain is to improve the realizability of converting customer procurement budgets into equipment deliveries and supplier revenue. The credit market also began to respond. Markit data showed that the spread on CoreWeave's five-year credit default swaps (CDS) narrowed intraday on October 27 to 1,041.4 basis points, the lowest level in more than a week; the latest CNB report showed that after Meta announced its equity financing, its CDS spread also retreated. The underlying mechanism behind these dynamics is obviously that increasing equity capital and reducing market expectations of an imminent massive bond issuance can simultaneously improve the capital structure and the supply-demand balance for credit bonds. Therefore, the more noteworthy change at present is that while financing costs remain high, funding availability is improving, and market concerns that AI projects will be forced to contract are beginning to cool. This also explains why equities can first trade on order and earnings repair, while bonds of companies with different credit profiles remain clearly differentiated. As Wall Street financial giant Goldman Sachs Group, Inc. took on a US$210 billion financing mandate, the U.S. semiconductor sector extended Friday's rebound and the market began to trade the "capital relay" logic, and Wall Street institutional investors' concerns about a financing crisis in artificial intelligence computing power infrastructure eased markedly. The severe selloff in U.S. semiconductor and broad technology stocks last week occurred because market participants were widely and repeatedly asking "who will bear the massive costs associated with trillion-dollar-scale AI computing power infrastructure construction." This week's news partly answered Wall Street's doubts: the US$63 billion AI chip deal finally reached between semiconductor giant Broadcom Inc. and Anthropic, Meta's equity financing, SpaceX's leasing of large AI computing power equipment resources, and Anthropic's IPO financing all highlighted that AI capital expenditure is expected to continue to receive strong market funding support. It can therefore be inferred that the market is reassessing the possibility that financing pressure will slow the procurement process for AI computing power resources and delay large orders for core AI infrastructure hardware such as AI chipsthis is precisely the core mechanism by which the "capital relay" supports the recent counteroffensive in the global semiconductor sector. Market action also provided direct confirmation: after plunging 6.72% on October 22, the Philadelphia Semiconductor Index rebounded for four consecutive trading days and closed at 11,684 points as of October 28, up about 8.87% cumulatively from the October 22 close; the Nasdaq 100 Index rose for three consecutive days from October 26 to 28, rebounding about 2.95% cumulatively. Financing and memory earnings first helped stabilize the market, and then the Microsoft Corporation and Alphabet results released after the close on October 28 further provided evidence of cloud business growth for this repair. From a trading mechanism perspective, declines in crowded positions easily trigger fund risk limits, stop-losses, and synchronized reductions; when new positive catalysts improve earnings expectations and volatility falls, forced selling pressure has a chance to ease, and fundamentals once again become an important basis for pricing. Cloud revenue and memory profit validate each other: "AI faith" begins to gain strong support from AI application operating results The strong growth in Microsoft Corporation's and Alphabet's cloud computing businesses, along with a series of positive growth developments from leaders in the AI computing power supply chain such as SK Hynix, Seagate, and Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, added more weighty commercialization evidence to Nomura's judgment of sentiment repair. Microsoft Corporation Azure cloud computing revenue grew 48% year-over-year, and overall cloud computing businessMicrosoft Cloud revenuereached US$63.9 billion, up 30%; management expects Azure growth of 49%50% next quarter, and free cash flow of about US$18.6 billion for the quarter was also significantly better than market expectations. Alphabet's cloud computing business segment for the third quarterGoogle Cloud revenuereached US$30.709 billion, up 103%, with enterprise AI infrastructure, AI solutions, and core cloud services jointly contributing to growth, while TPU system sales also constituted an important increment. The judgment jointly supported by the two earnings reports is that AI investment is forming measurable business revenue, and Microsoft Corporation's cash performance further strengthened market confidence in the continued investment capacity of large cloud vendors. On the upstream side, profit and orders provided cross-validation. HBM and server DRAM leader SK Hynix reported third-quarter revenue of KRW104.62 trillion, up 328% year-over-year; operating profit of KRW83.33 trillion, up 632% year-over-year, with an operating margin of 80%, and long-term agreements signed with 14 major customers had already covered more than half of capacity for 20272028; management's judgment that capacity through 2029 was "substantially sold out" took into account both signed agreements and demand under negotiation. From an industry mechanism perspective, AI agents executing more tasks will increase demand for model inference, tool calls, context processing, and data retention, driving consumption of computing, memory, storage, and interconnect resources; when demand translates into cloud revenue, long-term procurement arrangements, and supplier profits, the semiconductor bull market gains a more complete basis than simply raising capital expenditure. What truly enhances the resilience of the AI trade is the gradually forming mutual support among the accelerated expansion of AI commercialization around cloud computing businesses, continued capital absorption, and profits from scarce supply. In addition, bullish views on Wall Street are converging from different levels. Goldman Sachs Group, Inc.'s "GOAL Kickstart" maintained a 3-month and 12-month overweight on equities even when its risk appetite indicator fell to about -0.5, based on earnings resilience, lower valuations, and reduced positioning crowding; the previous concentrated reduction in tech stocks created a more flexible trading environment for new positive earnings catalysts. Morgan Stanley's Wilson maintained his S&P 500 year-end target of 8,000 points and listed AI financing, the midterm elections, and Federal Reserve liquidity as important catalysts for the end of the adjustment; the absorption of new financing is responding to the capital supply issue among them. Deutsche Bank provided a seasonal dimension: in 21 of the past 23 midterm election years, gains were recorded in the three months after early October. These judgments respectively correspond to valuation and positioning, event digestion, and historical seasonality, while the latest cloud business and memory results added real earnings support to the year-end bullish narrative. The rebound logic in the memory sector is more concentrated in the gap between scarce supply and pessimistic valuations. Goldman Sachs Group, Inc. cut its KOSPI target to 9,000 points from 12,000 points, but that still implied about 62% upside relative to the report's reference level, and it believed that the scenario of a 65% decline in next-year earnings implied by Korean semiconductor share prices was overly pessimistic. At the same time, a TrendForce expert meeting organized by Goldman Sachs Group, Inc. expected that DRAM price increases could last until the first half of 2028, with the blended average price of HBM rising 122% year-over-year in 2027; constraints in cleanrooms, equipment delivery, and product upgrades make it difficult for new investment to immediately effective supply. Reports that Alibaba, Tencent, and ByteDance are seeking long-term DRAM contracts also show that demand to lock in supply is expanding to larger-scale cloud vendors globally. Capital has already begun to express optimism that the AI trading frenzy will return: from October 1 to 23, Korean retail investors aggressively net bought KRW315.4 billion of Samsung and SK Hynix-related leveraged products; as of October 22, Korean investors net bought about US$3.548 billion of SOXL (the triple-leveraged bullish ETF tracking the Philadelphia Semiconductor IndexU.S. ticker "SOXL"), accounting for about 73.9% of net U.S. equity purchases during the same period. What drives the memory re-rating is that order visibility and earnings performance are expected to be better than the contraction scenario previously implied by share prices, while the return of capital has significantly amplified this repair of positive growth and expansion expectations.