Impressed by the so-called FANG shares’ performance over the past year? Japan has a similar group that is doing even better.
Meet the Sunrise stocks: Softbank Group Corp, Nintendo Co, Recruit Holdings Co and Sony Corp (SNRS, or Sunrise). They have risen an average of 65 percent in the 12 months through Friday, versus an average 44 percent gain for the group known as FANG: Facebook Inc, Amazon.com Inc, Netflix Inc and Google’s parent Alphabet Inc. Japan’s benchmark TOPIX added 19 percent in the period.
While both clusters feature members of the new economy, one thing that binds the Sunrise stocks, as some market participants have taken to calling them, is their overseas prospects.
Masayoshi Son’s Softbank, for instance, has been seeking a turnaround at Sprint Corp in the US, Sony has its PlayStation, semiconductor and entertainment businesses, while Nintendo’s Switch console has become a global bestseller. Recruit, perhaps the least known of the group outside Japan, bought a US job site in 2012.
“All four companies had been roiled by lackluster earnings for two or three years,” said Richard Kaye, a portfolio manager at Nippon Comgest Inc. “Their overseas potential had been underestimated until now, but they’re now being reassessed.”
Nintendo’s stock more than doubled over the 12 months through the end of last week, the best performance of the Sunrise stocks, as strong sales of Switch domestically and overseas cheered investors.
Recruit surged 59 percent on bets US online job search engine Indeed Inc would contribute to profit. Softbank added 55 percent on signs Sprint’s earnings have bottomed out and on expectations for its US$100 billion Vision Fund, while Sony gained 34 percent.
Oasis Management chief investment officer Seth Fischer recommended Sony’s shares at the Sohn Conference in Hong Kong last week.
Fischer said Sony, like the FANGs, was a good investment idea “hiding in plain sight.”
He cited the turnaround under Kazuo Hirai, good corporate governance and strong businesses, including home gaming, as reasons for suggesting the stock could rise as much as 39 percent.
The Sunrise stocks helped push the TOPIX above 1,600 earlier this month, a level not seen since 2015.
The FANGs, meanwhile, tested US equity bulls on Friday, with each company falling at least 2.8 percent, as the NASDAQ 100 posted its biggest drop relative to the Dow Jones Industrial Average since 2008.
The Sunrise shares followed the FANG group lower in Tokyo yesterday, with each of the four Japanese companies sliding at least 1.2 percent. However, some investors are not too concerned about the technology-stock selloff.
“The FANG shares’ decline is merely a temporary adjustment after they were bought too much,” said Naoki Kanemoto, a Tokyo-based senior fund manager at Sumitomo Mitsui Asset Management Co. “I see the overall uptrend returning.”
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to