Memory chip scarcity keeps AI thesis intact: RBC Wealth Management

• Scarcity in high-bandwidth memory (HBM) for AI is expected to persist for 6-12 months due to supply bottlenecks, supporting memory makers.
• Recent volatility in South Korean equities is attributed to technical factors like leveraged single-stock ETFs and margin loan unwinds, not a weakening AI thesis.
• The market is shifting from AI narratives to demanding concrete execution and economic profits, with opportunities seen in healthcare and financials.
• Concerns about sticky inflation and US debt sustainability could lead to higher US Treasury yields.

Gautam Chadda of RBC Wealth Management believes the AI thesis, particularly for high-bandwidth memory, remains intact for 6-12 months due to supply bottlenecks, despite recent South Korean market volatility driven by technical factors. He highlights a market shift towards demanding execution and economic profits, with opportunities in healthcare and financials, while cautioning on inflation and US debt sustainability.