HSBC Maintains Bullish Outlook on US Stocks Amid Chip Sector Volatility

HSBC has reiterated its bullish stance on US equities, maintaining a mild overweight position. The bank attributes this outlook to resilient economic growth, broadening earnings across sectors, and ongoing leadership in artificial intelligence (AI). In a recent note, HSBC analysts characterized the significant pullback in semiconductor stocks as a rotation into software rather than a broader withdrawal from the AI trade. This perspective is supported by a notable rebound in software stocks, with the Morningstar Global Software-App Index rising approximately 16% from its June low, while major firms like Salesforce, Workday, and ServiceNow have seen sharp price increases in recent weeks.

The bank has observed that semiconductor names, including Samsung, SK Hynix, Intel, and Micron, have each declined by roughly a third over the past month. HSBC interprets this movement as investors reassessing whether profit growth can meet elevated expectations, rather than a decision to exit the semiconductor space altogether.

HSBC emphasizes the structural demand story in Asia, particularly regarding the data center build-out, which it believes will support the entire supply chain for chips, equipment, cooling, and power. The bank projects that AI capital expenditure will increase from below $400 billion in 2025 to over $1 trillion by 2028, with Asia's data center capacity expected to more than double by 2030, reaching around 40% of global capacity.

In China, HSBC has noted a renewed investor preference for sectors such as biotech, internet platforms, hyperscalers, and electric vehicles. The bank's outlook suggests that the current volatility in the semiconductor sector is a repositioning phase within a still-intact growth narrative, rather than a turning point in the market.