Galaxy Securities said in a Sept. 23 report the Fed hiked 25bps to 3.75%–4.00%
on Sept. 16, the first increase since July 2023. A systemic rise in risk-free
lifting discount rates beyond the policy rate and compressing equity
P/Es, disproportionately hitting high-valuation growth stocks dependent on
distant cash flows. The AI narrative remains strong, but pricing is shifting
from long‑term visions to near‑term realization. On the first trading day after
the hike, storage, CPUs, foundry and optical‑interconnect segments outperformed;
strong current earnings and short investment payback make these compute‑hardware
nodes less sensitive to higher rates. Valuation differentiation is accelerating:
hardware with verified cash flows and earnings (advanced process, memory,
optical interconnect, equipment and materials) is benefiting, while
narrative‑driven, unprofitable names are being further squeezed.
