1. Market getting closer to “Capitulation Phase”.

The chaos caused by contradictory pronouncements landing within minutes of each other has taken things to a new level, even by the erratic standards of Trump’s second term.
“Equity positioning is now clearly underweight in our reading, although not yet close to the bottom of the band,” notes Deutsche Bank’s Parag Thatte. “The current selloff is in the vicinity of a typical bottom in size and time,” he says, pointing to the historical average three-week drawdown of 6% to 8% during geopolitical shocks”.
Given that about half of leading global equity benchmarks are already in or near a 10% correction from pre-conflict levels, it’s fair to ask whether investors should rather ride out the turbulence.
That’s unless the longer term view is that a deep recession is on the way, caused by higher energy prices and persistent uncertainty in the Middle East.

2. Impact of the Strait of Hormuz closure on fertilizers.

Roughly one-third of all internationally traded fertilizers and nearly half of traded urea volumes are either produced in the region or rely on its transit routes. Specifically, the Gulf accounts for around 45% of global urea exports, roughly 30% of ammonia exports and around 25% of phosphate fertilizers.
Reduced fertilizer use could lower rice and wheat yields, driving food inflation.
Even in parts of Europe, such as Germany and Italy, indirect effects via higher natural gas prices could force fertilizer plants to shut down and increase operating costs for farmers, reinforcing rural discontent and complicating policy debates over agricultural subsidies, energy transition goals and trade competitiveness.

3. Autonomous trucking is beginning to commercialize in the US.

Last week, the Wall Street Journal reported early feedback from Tesla “Semi” pilot drivers ahead of its commercial launch later this year. Drivers highlighted the centered seat, faster charging, and its 500-mile range as standout features. Rumored to cost around $300,000 ~$100,000 less than competing electric trucks but roughly twice the price of diesel alternatives.
“Autonomous trucking could generate ~$320 billion in revenue by 2030, while robotaxi platforms scale to ~$1.9 trillion, as shown below.”
Source: ARKK

4. Microsoft under attack?

Last week, the Wall Street Journal reported that OpenAI is consolidating its enterprise applications—ChatGPT, Codex, and its Atlas browser—into a single application, increasing its competitive positioning vis-à-vis Anthropic in the enterprise space.
Claude app—including Chat, Cowork, and Code—has struck a responsive chord with knowledge workers, more than doubling Anthropic’s ARR (annualized revenue run rate) in little more than two months, from $9 billion in December to $19 billion in early March.
As measured by the revenue inflections at both OpenAI and Anthropic, knowledge workers are transforming the way they work. Both Anthropic and OpenAI are on track to surpass the revenue associated with Microsoft’s Office and Windows, the premier enterprise operating system and productivity franchises that have evolved over the last 40 years, as shown below.
Clearly, the structure of the enterprise knowledge work industry is changing rapidly. AI is likely to erode the competitive positioning of incumbents in favor of a new class of platforms.

5. AI Agents (always “on” memory) will drive the next wave of memory demand.

AI inference business model transition into agents (agents swarm and orchestration) requires a consistent data feed-in and processing loop translating into tremendous token generation. Physical and edge AI are the next area of growth and a series of new device applications (e.g. wearables, humanoid, and others) are under development.
Therefore, the memory market will expand further to US$900+bn in 2027 with ~50% market cap upside!
This elongated memory upcycle bodes well for SK hynix, which is still only trading at 6 P/E.

Below: Estimates are continuously increased.

Not a subscriber yet?