Barclays Backs Japan AI Trade as Nikkei’s 32% Gain Trails More Concentrated Korea, Taiwan
Updated
Updated · CNBC · Jun 4
Barclays Backs Japan AI Trade as Nikkei’s 32% Gain Trails More Concentrated Korea, Taiwan
3 articles · Updated · CNBC · Jun 4
Summary
Barclays said Japan may offer Asia’s best AI risk-reward now, arguing Tokyo gives investors exposure across the AI supply chain rather than through a few dominant chip stocks.
The bank contrasted that with heavier concentration elsewhere: Samsung Electronics and SK Hynix make up more than half of South Korea’s Kospi, while TSMC accounts for about 40% of Taiwan’s Taiex.
Japan’s Nikkei 225 has risen about 32% this year and its top 10 stocks represent roughly 45% of the index, with major constituents spanning chip equipment, telecoms, retail, pharmaceuticals and chemicals.
Barclays and Nomura said Japan should still benefit if the AI rally continues, with companies such as Advantest, Tokyo Electron and SoftBank tied to multiple parts of the theme.
Beyond AI, Barclays sees support from governance reforms, rising shareholder returns, buybacks, unwinding cross-shareholdings and the return of inflation lifting nominal earnings growth.