"Don't fight AI!" HSBC: Bond market storm won't stop stocks from pushing higher; AI theme remains constructive

Title context: "Don't fight AI!" HSBC: Bond market storm won't stop stocks from pushing higher; AI theme remains constructive Text: Against the backdrop of a fresh round of selling in the bond market and heightened volatility in global risk assets, equities have shown rare resilience. The S&P 500 continues to grind steadily toward record highs, indicating that capital's preference for equity assets, especially the AI main line, remains unshaken. HSBC's Global Investment Research team stated bluntly in its latest view: investors should not "fight the AI trade." The bank believes that the AI sector's earnings momentum is strong, its monetization path is becoming clearer, and valuations, after adjustment, are no longer expensive, leaving the overall risk-reward profile still attractive. Earnings momentum and monetization signals resonate HSBC strategists pointed out that AI remains one of the hardest trends in the current market to bet against. Monetization signals continue to be positive: reports say OpenAI's enterprise business sales have more than doubled since July, showing that corporate willingness to pay for generative AI is rising. At the same time, accelerating demand for AI inference is driving stronger cloud revenue at major hyperscalers, while GPU rental prices remain firm. This means the AI industry chain is shifting from a "capex story" to a "revenue realization story," easing market concerns about the returns on computing power investment. Although AI model pricing signals are mixed and industry competition may pressure margins in some segments, better-than-expected earnings, continued upward analyst revisions, and the earlier sharp valuation de-rating in tech stocks together indicate that a considerable amount of downside risk has already been priced in. After a round of "valuation killing," valuations across the tech industry chain look relatively cheap, leaving room for further gains. Bond market storm unlikely to shake the AI main line The recent bond selloff has pushed yields higher, which would normally pressure high-valuation growth stocks. However, equity market performance shows that the earnings support behind the AI main line is offsetting the impact of rising rates. HSBC believes that as long as AI monetization continues to be validated, corporate IT spending keeps tilting toward AI, and demand for cloud and computing power remains strong, the AI-driven stock market rally still has further potential. From a market structure perspective, the AI trade has shifted from being purely concept-driven to earnings-driven. Investors are no longer focused on whether there is a story, but on whether it can make money. Hyperscaler capex remains elevated, but revenue realization and order visibility are improving; growth in AI inference demand means computing power consumption is shifting from training to inference, making the commercial loop clearer; firm GPU rental prices reflect a shortage of computing power supply. Together, these signals reinforce the fundamental support for the AI main line. Allocation broadening and risks coexist From an allocation perspective, the AI trade may broaden from a handful of leaders to a wider range of areas, including computing infrastructure, cloud computing, semiconductors, AI applications, and supporting segments such as power and energy. But risks should not be ignored either: if bond market volatility intensifies and yields continue to surge, growth stock valuations could still come under pressure; if the returns on AI capex fall short of expectations, regulation tightens, or competition worsens, sector volatility could also amplify. HSBC's signal is clear: with bond market clouds and stock market highs coexisting, AI remains one of the clearest main lines in global equity markets. For investors, rather than shorting AI against the trend, it is better to look for names with earnings realization and reasonable valuations amid the volatility.