Giant's 20% Plunge: Trouble for Semiconductor Chips?

Overnight, the situation changed dramatically. The UK announced a rate cut, and stock markets in Europe and America plummeted collectively. Intel's stock plummeted by 20% after hours. What exactly happened? What impact will it have on A-shares and the semiconductor chip market?

Intel's third-quarter revenue outlook was lower than expected, and the company plans to lay off more than 15% of its workforce. Dividends will also be suspended in the fourth quarter. This news directly led to a 20% plunge in Intel's stock after hours and also dragged down the entire US technology giants. ARM's stock fell by more than 15%, Qualcomm's by more than 9%, and AMD, Broadcom, and ON Semiconductor's by more than 8%.

The day before yesterday, ARM's performance outlook exceeded expectations, and US technology giants celebrated collectively. However, last night, they suffered a collective blow due to Intel's performance outlook not meeting expectations. It's quite alarming that any performance news can cause these technology giants to soar or plummet. If we're talking about extreme volatility, it seems that the US stock market is more dominant, with A-shares trailing behind.

At the root of it all, the US technology track is too crowded, with excessive gains in the early stage. Any slight change can cause capital to flee.

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Currently, there is a widely circulated but incorrect view in the market: the Federal Reserve's rate cut is good for US technology stocks. Their reasoning is that the rate cut releases liquidity, which drives up US technology stocks. If this logic holds, with the Federal Reserve's rate cut imminent, US technology stocks should continue to rise, and the Nasdaq should continue to soar. However, this is not the case. Recently, technology giants have been adjusting, and the Nasdaq has been on a downward trend, indicating that this logic does not hold water.

The Federal Reserve's rate cut will indeed release liquidity, but the released liquidity does not necessarily have to be invested in US stocks. It can be invested in countries with better investment opportunities.

There is also a very critical point: when the Federal Reserve cuts rates, the US dollar will depreciate in the medium term, reducing the attractiveness of US dollar assets. The space for risk-free arbitrage will also be compressed, and capital will gradually withdraw from the lofty US stock market to seek better investment opportunities globally.

Looking at the global economy, among the most dynamic economies, apart from the Chinese stock market being at a historical bottom, there is no market with lower valuations than A-shares and Hong Kong stocks. The peak of foreign stock markets is precisely our opportunity. If you are an international capital shark holding a large amount of funds, where would you choose to invest at this time? Now, the stock markets of major economies such as Europe, America, Japan, and India have reached dizzying heights, and Japan, Germany, France, and the Nasdaq are already on the adjustment path. Looking ahead, opportunities are approaching for A-shares.

Some friends may say that the pressure of economic recovery is great, and market confidence is insufficient. Black Horse tells family members that this is not a problem at all. China's 5% GDP growth rate is a rare existence globally, directly leaving Europe and America behind. How many in the world can compare? Therefore, the fundamental reason for the stock market not rising is not an economic issue but has deeper reasons. There are always some misleading views circulating in the market, hoping that family members can look deeper when looking at issues, see through the phenomenon to the essence, so as to get closer to the truth and not follow the crowd.

The stock market is a combination of price and value scales, as well as a market. However, its subject matter is stocks, which are essentially the same as other commodities. The most basic and fundamental factor determining price fluctuations is the supply and demand relationship, and all other influences affect price fluctuations by affecting the supply and demand relationship. By grasping the core key points, it is possible to analyze the market situation and future trends from the essence.Currently, the reform of the capital market is accelerating, the market ecosystem is improving day by day, the quality of listed companies is continuously increasing, share reductions are becoming fewer, share increases are becoming more, investment value is becoming higher, and the attractiveness of the stock market will also become stronger. Along with the growth of long-term funds and patient capital, the scale of A-shares price and value will gradually tilt towards the value side, lifting the price side higher. The heavier the weight on the value side, the higher the price side will be lifted.

The overall market valuation has fallen to the eighteenth level underground. At this time, it is really no longer a time for panic, but a time for the "others fear, I am greedy" moment as Buffett said. The bull market cycle is approaching, and the next two to three years will be a very good investment stage for A-shares, and the current time is a very rare major bottom area.

The sharp decline in European and American stock markets will cause some disturbances to A-shares in the short term, but it does not affect the inherent trend of A-shares. The sharp decline in US technology giants will have some suppression on the technology track of A-shares such as semiconductor chips. Observe the performance of the technology sector today to see if it can withstand it. For the technology track, I am highly optimistic in the medium term, and there are two core logics:

First, the industry prosperity has been greatly improved. AI is accelerating development, bringing incremental demand to the market, and consumer electronics are also accelerating the recovery.

Second, there is a huge space for domestic substitution. Due to international situation issues, in the second half of the year and next year, independent control is very likely to become the market trend again.

The above content is only personal opinion and does not have any guiding significance. The mentioned individual stocks and funds are only for recording market opinions and actual operation processes, accumulating materials for future creation, and do not make any recommendations. The past performance of funds does not represent the future, and investors need to pay attention to market volatility risks.