FUNDAMENTALS

Spot gold was little changed at $4,339.59 per ounce, as of 0017 GMT, after a more ‌than 7% ⁠gain last ⁠week.
Bullion hit its highest since June 17 on Friday after weaker-than-expected U.S. jobs data reduced expectations for interest rate hikes.

U.S. gold futures were ​flat at $4,399.40.

Data on Friday showed the U.S. economy unexpectedly shed jobs in July and previously reported job gains for ​the prior two months were revised sharply ⁠lower.

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Following ‌the data release, futures markets flipped the odds ​of a ​rate hike at the September 15-16 Federal ⁠Open Market Committee meeting from likelier-than-not to a worse-than-even chance.
​A lower interest rate environment boosts the attractiveness ​of gold against income-generating assets, as bullion itself earns no interest.
Federal Reserve Bank of Richmond President Thomas Barkin said hiring data for July represented a continuation of recent trends.
Key U.S. inflation data due this week include the ‌Consumer Price Index (CPI) and the Producer Price Index (PPI).

On the geopolitical front, Iran said it was nearing ​a final pact ​with Oman defining ⁠new shipping lanes between them through the Strait of Hormuz but repeated that the U.S. must meet other conditions, including compensation and ​an end to sanctions and military threats, before the strategic waterway is reopened.

Among other metals, spot silver rose 0.5% to $63.85 per ounce, platinum gained 0.2% to $1,748.25 and palladium slipped 0.5% to $1,371.16.

DATA/EVENTS (GMT)

0800 China Total Social Financing Jul

0800 China M2 Money Supply YY Jul

0800 China New Yuan Loans Jul

Since the generative AI narrative began accelerating on October 1, 2022, Asian technology stocks have surged 423%, outpacing both U.S. and global tech benchmarks by 228 and 221 percentage points, respectively. 

Key Takeaways

• Asian tech stocks have surged 423% since October 2022, outperforming U.S. and global tech by over 220 percentage points, yet still trade at more attractive valuations with stronger earnings growth.
• Asia dominates as the physical backbone of the AI supply chain, supplying critical hardware components that U.S. and European firms largely cannot produce.
• Decades of embedded ecosystem advantages, skilled labor, and coordinated industrial policy make Asia’s tech supply chain difficult for other regions to replicate, even as reshoring efforts accelerate.

The gains raise a provocative question for investors: are the biggest winners from artificial intelligence not in Silicon Valley, but across the factories and fabrication plants of Asia?

While American companies have dominated headlines by building the large language models, cloud platforms, and consumer applications that define the AI era, a different story has been unfolding upstream. Asian technology firms have positioned themselves as the essential enablers of AI deployment, supplying the semiconductor chips, hardware, and infrastructure without which none of the AI boom would be physically possible.

A Different Role in the AI Ecosystem

The distinction between U.S. and Asian tech is structural, not incidental. Within a single AI server, Asian manufacturers supply components that American and European firms largely cannot: optical transceivers, cooling fans and modules, passive components, and server chassis. The region’s manufacturers also produce critical parts for physical AI and robotics, including actuators, sensors, and batteries.

This specialization shows up in the numbers. The MSCI AC Asia ex Japan Information Technology Index maintains a correlation below 0.6 with both the Nasdaq and the MSCI US IT Index, suggesting Asian tech stocks move to a different rhythm than their American counterparts. For investors already holding U.S. or global tech positions, that low correlation makes Asia tech a natural diversifier rather than a redundant bet on the same trend.

The opportunity set extends beyond AI hardware alone. Asia’s tech exposure spans electric vehicles and autonomous driving, healthcare technology, digital payments, e-commerce, and broader digital transformation, a diversified universe that gives investors more terrain from which to extract returns.

Why the Supply Chain Is Hard to Copy

Asia’s grip on the AI hardware supply chain did not emerge overnight, and analysts argue it will not be easily dislodged. The advantage rests on a combination of factors that developed over decades: a deeply interconnected production network spanning multiple countries, an experienced and cost-competitive workforce, and sustained government industrial policy aligned with private sector growth.

Geographic proximity between countries in the region has enabled faster innovation cycles and more rapid problem-solving, allowing Asian tech companies to iterate quickly and protect their margins. That agility is reinforced by decades of experience mass-producing high-precision components for consumer electronics, expertise now being redirected toward the complex components AI infrastructure demands.

Governments across the region have compounded this advantage through long-term, coordinated investment in infrastructure and talent pipelines. As other regions now pursue reshoring and localization strategies in response to AI demand, they face a challenge that goes beyond simply building factories: replicating an entire system of interdependencies built up over generations.

The result is that even as the United States remains the dominant source of AI-related demand, Asia has cemented its position as the world’s primary AI production hub. AI-related goods now represent a meaningful share of total exports for markets including China, Taiwan, South Korea, and Singapore.

Valuation Gap Persists Despite Outperformance

Perhaps counterintuitively, Asian tech stocks’ strong run has not erased their valuation discount to U.S. peers. Data as of May 29, 2026 shows Asian tech remains more attractively valued than U.S. tech, while also carrying stronger forecasted earnings growth, a combination that suggests the rally may not yet be fully priced in.

That gap looks more significant against the backdrop of an AI investment cycle that many analysts believe is still in its early stages. Comparisons to the 1990s technology boom suggest today’s AI capital expenditure cycle, measured as equipment and intellectual property investment as a share of U.S. GDP, has considerable room to run before reaching the peaks of that earlier era.

Industry forecasts project the global AI market will grow from more than $300 billion in 2025 to nearly $1.2 trillion by 2030, potentially driving between $3 trillion and $5 trillion in cumulative AI investment. That spending would flow toward AI chips, infrastructure, and the wider technology sector, much of it manufactured in Asia.

Risks on the Horizon

The bullish case is not without obstacles. Power constraints at data centers, production bottlenecks, and export controls on semiconductor chips and equipment all pose risks to the pace of buildout. Uncertainty over how quickly AI monetization and adoption will materialize, alongside mounting privacy, security, and regulatory concerns, adds further complexity. How effectively individual countries and companies navigate these headwinds will likely determine who captures the greatest share of the AI opportunity going forward.

The Bigger Picture

With the United States commanding roughly 76% of global technology benchmarks, investors without a dedicated Asia tech allocation may be systematically overlooking a significant and differentiated slice of the AI opportunity, one built not on chatbots and cloud subscriptions, but on the physical infrastructure making the AI revolution possible.

This article is the second installment in a five-part series examining the AI technology cycle and investment opportunities in Asia. The next installment will examine Asia’s competitive position in the AI server build-out.

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