Market volatility has recently increased significantly in Japan and South Korea as investors, especially retail investors, have heavily leveraged their investments in stocks.
Michiko Sakai, portfolio manager of Japanese equities at Morgan Asset Management, stated, "While severely underweighting the AI sector is risky, continuing to significantly increase AI holdings and expanding investment exposure also carries risks." She pointed out that the AI rally is no longer limited to a few "AI concept stocks" but has expanded to multiple sectors, including AI infrastructure, memory chips, and components, providing investors with more investment options. However, she also emphasized that the market is now increasingly sensitive to valuation levels and the sustainability of corporate earnings.
Michiko Sakai believes that AI investment is likely to continue growing in the future, but the real question the market needs to answer is: "Should the valuation of AI companies be based on short-term earnings or on long-term growth expectations?"
