HSBC's Private Bank, Wealth Arm Still Favours US Equities, Dollar

Editorial Staff

3 August 2026

continues to take a generally bullish view on US equities because it sees the country’s economic growth and AI prowess as being resilient. It takes the same positive view of the dollar, according to a note the bank issued late last week.

Recent falls in semiconductor stocks appear to be down to investors reshuffling their portfolios rather than a decision to quit the sector, Patrick Ho, chief investment officer, North Asia at HSBC Private Bank and Premier Wealth, said.

“We maintain a mild overweight on US equities, supported by resilient economic growth, broadening earnings and continued AI leadership,” Ho said.

Ho is taking a “neutral” position on fixed income duration and favours high-quality investment-grade credit. (Duration measures a bond's price sensitivity to interest rate changes.)

“The pullback in semiconductor and memory stocks looks like rotation rather than capitulation, driven by investors reassessing whether profits growth could meet the elevated expectations,” Ho continued. “We still see the structural AI theme as intact and maintain positions across the AI ecosystem in Asia including power, infrastructure, and industrial automation. Model competition is intensifying and pricing pressure is rising as the subsidised AI era fades, pushing providers towards monetisation via offerings like Model-as-a-Service (MaaS). In China, we have seen renewed investor’s preference for biotech, internet platforms, hyperscalers and EVs.”

Semiconductor stocks such as Samsung, SK Hynix, Intel and Micron have been hit, each of them dropping by about a third in the past month (source: Morningstar, 30 July). The Morningstar Global Semiconductor Index, which gained 60 per cent through the first half of 2026, has fallen 17 per cent from its June peak.

On the flipside, software stocks, sometimes unloved, are back in favour. The Morningstar Global Software - App Index has rebounded 16 per cent from its June low. Firms such as Salesforce, Workday and ServiceNow saw their stocks rise sharply over the past week.

Rotation, not surrender
“We see the current pullback in semiconductor and memory stocks as more of a rotation than capitulation,” Ho said.

Strong AI capital expenditure (capex), which is projected to increase from below $400 billion in 2025 to surpass $1 trillion in 2028, should help businesses bring in new revenues, he said.

“Asia is becoming the epicentre of the global data centre boom, with regional capacity expected to more than double by 2030 to around 40 per cent of global capacity. This build-out should boost demand across the data centre supply chain and power ecosystem, including chips, semi equipment, cooling, servers, commodities, on-site power generation, and energy storage. This is the core thesis of our High Conviction theme, Asia’s data centre boom,” he said.

Ho referred to the rapid ascent of the AI “token” market in Asia. (A token is the smallest unit of text an AI system uses to interpret and generate language. AI tokens are the basic units of AI work, much like kilowatt-hours are the basic units of electrical energy. These are used to measure how much digital intelligence is formed by every unit of power. This is a major topic as AI is now a large user of electricity.)