Sharef, a PIMCO fund manager, believes that AI capital expenditure continues to tilt toward data centers and infrastructure. Compared with U.S. tech giants, which face elevated valuations and rising debt burdens, Asian supply chain companies offer lower valuations, stronger earnings growth, and more direct benefits from the AI construction cycle.
Therefore, he has underweighted most U.S. equity giants and instead taken significant overweight positions$Samsung Electronics (005930.KR)$、$SK hynix (SKHY.US)$and$Taiwan Semiconductor (TSM.US)$in “pick-and-shovel” plays.
The surge in AI capital expenditure continues, but the direction of capital allocation is shifting: greater attention is being paid to the Asian AI supply chain, including semiconductors and data center infrastructure, rather than highly valued U.S. tech giants.
According to Bloomberg, PIMCO fund manager Emmanuel Sharef is increasing his exposure to Asian markets. He believes that, compared with U.S. tech stocks, Asian assets offer lower valuations, stronger earnings growth, and more direct exposure to data center construction.
At the same time, Sharef is underweighting most hyperscale cloud providers and members of the "Mag 7." In his view, persistently rising AI capital expenditures are increasing these companies' debt burdens, squeezing free cash flow, and introducing credit risks, thereby placing greater pressure on their elevated valuations.
Sharef stated, "You do not necessarily need to hold the most expensive stocks to capture a specific theme or market trend." The fund, with approximately $19 billion in assets under management, has outperformed 97% of its peers over the past three years.
AI Rally Spreads from Giants to "Pick-and-Shovel" Providers, Creating Opportunities in Asian Supply Chains
Sharef places greater emphasis on the transmission of AI capital expenditure along the industrial chain. As data centers continue to expand, new demand will arise for semiconductor components, cooling equipment, cabling, optical devices, power supplies, construction machinery, and metal materials.
Based on this view, the fund made substantial purchases last year,$Samsung Electronics (005930.KR)$、$SK Hynix (000660.KR)$and$Taiwan Semiconductor (TSM.US)$and currently allocates approximately 60% of its equity portfolio to related assets. These companies have relatively lower valuations and are better positioned to directly benefit from investments in AI infrastructure.
In Sharef's view, the AI trade is spreading from U.S. tech giants to the supply chain. As AI capital expenditure continues to tilt toward data centers, chips, and infrastructure, the true beneficiaries may not be limited to the most closely watched tech giants; these Asian "pick-and-shovel" providers could also emerge as winners in the next phase of the AI rally.
Editor/melody