HSBC Private Bank is keeping its six-month overweight call on global equities, arguing that AI-related opportunities extend beyond chipmakers to infrastructure and businesses adopting the technology.
The Nov. 1 Investment Monthly was co-authored by Willem Sels, HSBC Private Bank and Premier Wealth’s global chief investment officer, and Lucia Ku, global head of Wealth Insights at HSBC International Wealth and Premier Banking. It also rates U.S. equities overweight, with a growth and quality tilt. Japan is overweight, and Asia ex-Japan is selectively overweight, with South Korea and Hong Kong favored and Singapore neutral. Europe excluding the U.K. and emerging markets are neutral.
HSBC expects U.S. third-quarter profits to rise roughly 30% from a year earlier, led by Technology and Communications Services. FactSet’s Oct. 30 tracker put blended S&P 500 earnings growth at 30.2%, with 60% of index companies having reported. HSBC did not publish a calculation for its estimate. FactSet’s figure combines reported results with estimates, and the two measures’ coverage and methods are not established as identical.
The bank sees potential gains for hyperscalers and businesses deploying AI as computing costs fall and adoption improves efficiency, with possible new revenue streams. For chipmakers, the report sees support from current earnings and orders, but says demand growth may cool as competition intensifies. HSBC also points to energy security, infrastructure and reindustrialization as themes supporting its U.S. view.
The outlook follows a volatile stretch for technology shares. The Associated Press said AI valuation concerns weighed on trading on Oct. 30, when the S&P 500 lost 1.8% and the Nasdaq Composite slid 2.9%. In an Oct. 19 note, Sels said investor attention had shifted among AI’s growth promise, disruption risks and doubts about spending payoffs, a pattern he described as recurring.
A separate Reuters report on Oct. 26 said HSBC had lowered a global-equity rating to neutral from “max overweight.” The published accounts do not establish whether that rating covered the same strategy, client mandate or time horizon as the Private Bank’s November outlook.
In an Oct. 20 CNBC interview, HSBC CEO Georges Elhedery urged investors to examine data-center project contracts and pricing; EconoTimes previously covered his comments on data-center financing. HSBC says its monthly is general information, not investment research or a recommendation to buy or sell.
FactSet said 140 S&P 500 companies were scheduled to report third-quarter results in the week after its Oct. 30 update.
