Amid rising concerns about the inflated valuations of the ‘Magnificent 7′—seven leading U.S. technology companies—eight major Asian firms, dubbed the ‘Super 8′ are emerging as attractive and undervalued investment alternatives, poised to offer substantial returns and close the performance gap with their American counterparts.
Identified by UBS, a Swiss investment bank, these Asian companies are expected to attract significant investor interest and potentially offer substantial returns. This shift in focus to Asian tech giants underscores the increasing recognition of their potential and the opportunities they present in the current market landscape.
UBS has highlighted that the eight most promising technology stocks in Asia share similarities with the well-known Magnificent 7 in the U.S. stock market but are still considered undervalued.
According to CNBC, UBS has noted that the eight most promising technology stocks in Asia share similarities with the well-known Magnificent 7 in the U.S. market but are still considered undervalued. UBS predicts that over the next 12 months, these “Super 8″ companies, including Samsung, will not only close the performance gap with the Magnificent 7 but also outperform overall market returns.
This suggests that the Super 8 have significant growth potential and are expected to become more competitive, delivering impressive financial results and attracting increased investor interest.
The ‘Super 8′ companies identified by UBS include South Korea’s Samsung Electronics, Taiwan’s TSMC and Hon Hai Precision Industry (Foxconn), China’s largest gaming company Tencent, Chinese computer giant Lenovo, Japan’s semiconductor equipment firm Tokyo Electron, Indian tech giant Infosys, and Singapore’s semiconductor packaging equipment specialist ASMPT.
This year, the stock prices of these companies have been on the rise. From the beginning of the year to the present, Samsung Electronics has increased by over 10%, TSMC by 78%, and Foxconn by 103%. However, UBS believes these stocks are still underpriced. UBS noted that despite the potential of the AI industry and the dominant market positions of the Super 8 companies, they are currently undervalued.
Last year, the Magnificent 7, which led the rise in the U.S. stock market, saw an average increase of 45% this year, driven by the AI boom. However, there are increasing worries that stock prices might be inflated.
The Magnificent 7 comprises Apple, Microsoft, Amazon, Alphabet, Nvidia, Tesla, and Meta. The name, derived from the 1960s American Western film “The Magnificent Seven,” signifies the seven major stocks leading the U.S. stock market, a term first coined by Bank of America strategist Michael Hartnett.
Reuters reported that the recent surge in the S&P 500 index has been heavily concentrated in technology stocks, which underscores the importance of diversifying investment portfolios. There are increasing concerns that if investor sentiment towards certain high-performing stocks, such as Nvidia, shifts negatively, the current upward trend in the market could reverse.
