AI Hardware Boom Hits Speed Bump as Funds Flow Back to "Old Man Chip"

July 29th. The ongoing AI hardware bull market experienced a "sharp brake" amidst enthusiastic voices. Over the past month, previously strong performers such as storage, chips, and semiconductor equipment have collectively retraced, as the market's concerns over AI capital expenditure returns, valuation overextension, and Chinese supply chain competition have intensified. Funds have started to flow towards leading stocks listed in Hong Kong and undervalued "old economy" stocks. In terms of performance in the past month, leading AI stocks have seen significant declines:

· Korean stock SK Hynix (53% drop in 34 days)

· U.S. stock SanDisk (approx. 47% drop)

· U.S. stock Intel (approx. 34% drop)

· Korean stock Samsung Electronics (approx. 32% drop)

· U.S. stock Micron Technology (approx. 28% drop)

At the same time, some "old economy" stocks listed in Hong Kong have continued to strengthen, with funds flowing back into assets of established platforms such as Tencent, Meituan, Xiaomi, Alibaba, and JD.com. Among them:

· Xiaomi Group (up approx. 46%)

· Meituan (up approx. 36%)

· JD.com (up approx. 28%)

· Alibaba Group (up approx. 22%)

· Tencent Holdings (up approx. 11%)

Public data from the Korean Exchange shows that as of mid-July, foreign investors had net sold 12.1 trillion Korean won on the KOSPI main board and 338.1 billion Korean won on the KOSDAQ. In contrast, southbound funds into Hong Kong stocks have continued to increase. According to Morgan Stanley, from July 16th to 22nd, southbound funds had a net inflow of $1.6 billion into Hong Kong stocks; since July, the cumulative net inflow has reached $11.1 billion, bringing the year-to-date net inflow to $46.6 billion. After the crowded trade in the AI hardware chain receded, funds are moving out of Korean stock semiconductor high-elasticity assets and shifting towards Hong Kong-listed internet leaders, dividend assets, and undervalued core stocks.

Market insiders believe that as AI trading enters a deleveraging and valuation-cutting stage, funds are more inclined towards assets with a clear profit path and still have room for valuation repair. In the short term, Hong Kong-listed internet leaders, dividend assets, and traditional core stocks are absorbing some of the returning risk appetite.