China Merchants Securities, citing Microsoft and SK Hynix results, concludes the
AI sector still faces genuine supply constraints and shows no clear signs of
broad overcapacity. Large tech firms are increasing AI infrastructure investment
and customer follow-on orders are rising; earnings do not yet provide solid
evidence of an AI compute glut. Microsoft compute utilization and SK Hynix order
flows indicate the current imbalance is shortages of high-performance compute,
advanced storage and data-center support capacity rather than widespread
equipment idling. Near-term investment opportunities are likely to center on
segments that alleviate AI compute bottlenecks.
