Is Taiwan's Stock Surge Premature? Experts Warn of AI Stock Overvaluation

Taiwan's stock index surged in after-hours trading on the 4th, following the rise in U.S. stocks, with the PHLX Semiconductor Index up 6.55% and the Dow Jones Industrial Average up 907 points. This led to a strong rebound of 1,195 points in after-hours trading, closing at 44,539 points, driving Taiwan's stock market to open sharply higher on the 5th. However, renowned semiconductor analyst Lu Xingzhi posted on Facebook, noting that AMD and two other AI stocks fell in sync after U.S. market hours. Compared to SpaceX, their valuations are high, and only Astera Labs' financial performance significantly exceeded expectations, making the decline an investment opportunity.

Lu Xingzhi pointed out that the three companies related to AI demand all fell after earnings, regardless of their performance. AMD's revenue for Q2-Q3 exceeded market expectations, but the margin was small, and it didn't appear to be a major customer of TSMC (2330). Additionally, the surge in storage memory prices in the second half of the year affected PC chip demand, and the low gross margin of AI GPUs did not significantly boost overall gross margin.

Why did SpaceX and AMD rebound after earnings? Lu Xingzhi explained that SpaceX's revenue surged 66% quarter-over-quarter in Q2 due to leasing computing power to Anthropic, significantly exceeding market expectations. The AI division's losses were much lower than expected, and adjusted EBITDA was nearly $35 billion higher than expected. However, capital density increased significantly, with free cash flow outflows nearing $160 billion.

Lu Xingzhi mentioned that while AMD's AI GPU/CPU sales did not show significant short-term growth, Astera Labs, a major manufacturer of PCIE retimers and switches, saw significant revenue growth in Q2-Q3, far exceeding market expectations. This was due to the increased value of PCIE retimers and switches for each XPU, as well as the significant growth in shipments and revenue of Amazon and Google's self-developed XPU/CPU chips, which outperformed the shipments and revenue growth of major AI GPU and x86 CPU manufacturers.

Lu Xingzhi believes that AMD's financial figures were good but not surprising; SpaceX's revenue growth and reduced losses were positive, but high valuations and free cash flow outflows led to the post-earnings decline. Meanwhile, Astera Labs' financial performance was exceptionally strong, making the post-earnings decline an opportunity.