Japan Equity Strategy: Weekly Update and Dashboard (Jun 8)

研报英文原文证据摘录

Japan Equity Strategy: Weekly Update and Dashboard (Jun 8)

※ Please also refer to “Japan Equity Monthly Strategy: Sustainability of AI rally amid rising rates “(5/29)

Jun 8, 2026Equity Strategy (Rie Nishihara/Yong Guo)

Looking Beyond the AI Rally — Long-Term Growth Outlook for AI Infrastructure and IT Services

◼Decomposing the sustainability of the AI rally into EPS (earnings outlook) and P/E, the current picture shows that earnings forecasts for AI

semiconductors are being revised upward while valuation excesses are receding — making it difficult to characterize the market as a bubble at this stage

(figure).

◼That said, sector performance since May shows early signs that market attention is beginning to broaden from an AI-only focus toward Non-AI names as

well. While electronics and precision instruments led TOPIX’s approximately 6% monthly gain, chemicals, banks, and construction also outperformed.

The market is beginning to search for the next potential leaders, even as it continues to assess whether the AI rally can be sustained.

◼How should we think about Non-AI? Comparing EPS outlooks and share price performance across major Non-AI sectors, tech and financials are seeing

EPS gains translate into share price gains. Chemicals saw a rapid EPS upgrade entering May, with share prices beginning to follow. Meanwhile, sectors

that have seen earnings improvement but remain undervalued include capital goods and energy. Consumer discretionary (including autos) has seen

earnings rebound and share prices recover modestly, though the durability of this trend warrants close monitoring.

◼Among companies in IT services and related areas that had been under selling pressure due to the AI disruption theme, outperformers have begun to

emerge.