Global hedge funds continue their buying spree.
According to Goldman Sachs A newly released report indicates that global hedge funds are investing heavily in artificial intelligence. Exposure to related technology hardware reached its peak in October, with significant buying in semiconductors. And related chip industry stocks. Meanwhile, memory chips benefit from the artificial intelligence wave. The “supercycle” is accelerating in full force, with Samsung Electronics and SK Hynix raising the prices of their DRAM and NAND flash memory by up to 30%.
In addition, Goldman Sachs, in its latest report, raised its capital expenditure forecasts for leading Chinese cloud vendors, citing the surge in demand for AI inference as a driving force for Alibaba. With giants like ByteDance continuing to increase their investments, Alibaba 's total capital expenditure for fiscal years 2026 to 2028 is expected to reach 460 billion yuan, far exceeding the company's previous target of 380 billion yuan.
Global hedge funds go on a buying spree
In a client report, Goldman Sachs stated that since it began tracking data in 2016, hedge funds' exposure to AI- related technology hardware reached its highest level in October of this year. This suggests that speculative funds may believe the AI market will continue to rise.
Goldman Sachs stated that global hedge funds made significant purchases of semiconductor and related chip stocks in October, with buying concentrated in long positions, betting on a rise in the stocks of Asian and American companies.
Doug Peta, chief U.S. investment strategist at BCA Research, also stated in the report that in the current U.S. stock market, the stock prices of companies that are related to artificial intelligence, especially those that can obtain investment or improve their business from artificial intelligence, are booming, while the market performance of companies that are not related to the concept of artificial intelligence is significantly lagging behind.
Goldman Sachs stated that hedge funds' enthusiasm for technology stocks is shifting. Speculators have reduced their focus on US power stocks . The deal involves the power companies, which have long been considered a vital support force for artificial intelligence and its research and development.
Goldman Sachs further pointed out that hedge funds' enthusiasm is increasingly shifting towards semiconductors and related equipment, a shift that began in September.
In addition, Goldman Sachs also pointed out in the report that these hedge funds are no longer generally focusing on the largest technology companies, the so-called "Magnificent Seven", but are instead paying more attention to smaller companies related to the concept of artificial intelligence.
Goldman Sachs stated that purchases of Asian technology companies have driven overall capital inflows into emerging markets (excluding China), while hedge funds' bets on the Chinese market have reached "multi-year highs."
From the perspective of the industry chain, memory chips are ushering in a "super cycle" benefiting from the wave of artificial intelligence.
According to the Korea Economic Daily, major memory suppliers such as Samsung Electronics and SK Hynix will continue to adjust their pricing for customers in the fourth quarter of this year. The price increases, including for DRAM and NAND, will be as high as 30%, in response to the surging demand for memory chips driven by AI.
According to Citigroup and Morgan Stanley According to its semiconductor industry analysis report, the average selling price of DRAM is expected to rise by 25%-26% in the fourth quarter, more than 10% higher than the previous quarter, and the price surge may intensify further.
According to Morgan Stanley's forecast, this year, companies including Google and Amazon... Meta, Microsoft Tech giants, including [names of companies], will invest $400 billion in artificial intelligence infrastructure.
As AI investment shifts from large-scale data training to inference, DRAM demand growth is also expected to accelerate. (According to KB Securities, South Korea) Research director Jeff Kim predicts that if the current upward trend continues, the profitability of non-HBM memory chips may even surpass that of HBM next year.
Goldman Sachs: Upward
Meanwhile, in its latest report, Goldman Sachs raised its capital expenditure forecasts for leading Chinese cloud vendors, predicting that Alibaba 's total capital expenditure for fiscal years 2026-2028 will reach 460 billion yuan, far exceeding the company's previous target of 380 billion yuan. The bank believes that the surge in demand for AI inference is the core logic supporting this judgment; higher computing efficiency may actually increase the conversion rate of capital expenditure into cloud revenue, thereby accelerating revenue growth.
Meanwhile, the strategic differences among these giants are becoming increasingly apparent. Goldman Sachs points out that Alibaba leads in external AI cloud revenue and enterprise (To-B) services, with a clearer commercialization path. ByteDance, on the other hand, relies on its chatbot... "Doubao" holds the largest share in the To-C sector and daily token consumption, demonstrating its determination to explore AI applications for consumers.
The report points out that China's multimodal large models are making progress in the global market and have formed a differentiated competitive advantage by using strategies such as open source, low price and high speed.
The global application of Chinese AI models is also increasing. The report cites Airbnb. The CEO of Airbnb stated that the company is using Alibaba's Qwen model extensively to support its customer service agents, highlighting the growing global recognition of Chinese open-source AI models.
In terms of commercialization, Chinese To-C applications are following the path of ChatGPT. Besides ByteDance's "Doubao" accelerating the integration of e-commerce functions, Alibaba's Quark has also launched "Zaodian," a one-stop AI image and video creation platform. Goldman Sachs believes that the commercialization path of Chinese To-C chatbots is still evolving and may ultimately be driven more by advertising revenue.
In terms of valuation, Goldman Sachs believes there is no AI bubble yet, and its US strategists predict the US AI capital expenditure boom will continue until 2026. The report shows that Tencent and Alibaba's projected 2026 price-to-earnings ratios (GAAP) are 21 and 23 times respectively, which are still at a "not demanding" level compared to Google's 24 times and Amazon and Microsoft 's 28-30 times.
Based on this, Goldman Sachs reiterated its "buy" rating on Alibaba and Tencent.
(Source: Securities Times)
