Is the next winner in the AI race emerging? PIMCO avoids US stock giants and heavily invests in Asian "shovel sellers."

The AI capital spending frenzy continues, but the direction of investment is shifting: compared to the highly valued US tech giants, the Asian AI supply chain, including semiconductors and data center infrastructure, is receiving more attention.

According to Bloomberg, Pimco fund manager Emmanuel Sharef is increasing his holdings in Asian markets. He believes that Asian assets offer lower valuations, stronger earnings growth, and more direct exposure to data center construction compared to US tech stocks.

Meanwhile, Sharef is underweighting most hyperscale cloud providers and members of the "Big Seven" tech giants. In its view, the ever-increasing AI capital expenditures are pushing up these companies' debt burdens, squeezing free cash flow, and creating credit risk, putting greater pressure on their already high valuations.

Sharef states, "You don't necessarily need to hold the most expensive stocks to capture a particular theme or market trend." The fund, with approximately $19 billion in assets, has outperformed 97% of its peers over the past three years.

The AI trend is spreading from tech giants to "shovel sellers," creating opportunities for the Asian supply chain.

ShareF places greater emphasis on the transmission of AI capital expenditures to the industry chain. As data centers continue to expand, new demand will be generated in sectors such as semiconductor components, cooling equipment, cables, optical equipment, power supplies, construction machinery, and metal materials.

Based on this assessment, the fund made significant purchases of Samsung Electronics, SK Hynix, and TSMC last year, and currently allocates approximately 60% of its equity holdings to these companies. These companies have relatively lower valuations and are more directly benefiting from investments in AI infrastructure.

According to Sharef, AI deals are spreading from US tech giants to the supply chain. As AI capital spending continues to tilt towards data centers, chips, and infrastructure, the real beneficiaries may not just be the most watched tech giants; these Asian "shovel sellers" may also become the winners in the next AI boom.

Risk warning and disclaimerInvesting involves risk; please exercise caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Any investment decisions made based on this information are at your own risk.