TechFlow news, according to Chaoxiang Research, JPMorgan's stock strategy report on July 20 pointed out that AI-related stocks have encountered fierce selling pressure in the past few weeks, the South Korean stock market fell 25% from its high, the Philadelphia Semiconductor Index fell 20%, and individual stocks such as Samsung and Micron fell between 20% and 50%. The report believes that the core driver of this decline is technical factors and position clearing, with no deterioration in fundamentals. The gap between the relative price and relative earnings trends of semiconductors continues to widen, but the tight supply-demand balance of DRAM and NAND will continue until 2028, DRAM spot prices remain at high levels, Micron has also raised its earnings guidance, judging that supply-demand tension will continue at least until 2027. The RSI of the Philadelphia Semiconductor Index is close to the oversold range, and the momentum gains accumulated year-to-date have been largely erased.
JPMorgan expects that once the oversold signal is confirmed, the window for a rebound will open, and recommends investors to allocate to semiconductors in batches during the summer. The beat rate for Q2 earnings reached 97%, and S&P 500 companies beating expectations outperformed the market by an average of 1.7 percentage points on the day of earnings release. In terms of allocation, JPMorgan increased stock allocation from 60% to 65%, and the Eurozone allocation from 8.7% to 11%. At the industry level, it overweights semiconductors, mining, capital goods, automobiles, insurance, and banks, and underweights software, business services, media, and other "AI Cannibalization Group". In terms of geopolitical conflicts, the report believes that the "Buy the Dip" strategy since the end of March remains effective.
