Asia Cross Asset: Taking stock of the North Asian equity surge

North Asian equity markets, particularly in Korea and Taiwan, have experienced parabolic growth driven by sustained AI-related capital expenditure from U.S. hyperscalers. Improved AI monetization and a shift in the macro environment from Goldilocks to stagflation have narrowed market leadership, concentrating gains in momentum-heavy tech stocks. Asia equity and quant strategist Mixo Das highlights that while hardware demand remains robust, the sector faces risks from extreme investor positioning and potential policy shifts. A notable disconnect persists between this equity rally and the underperformance of the Korean won and Taiwan dollar, largely attributed to foreign institutional profit-taking and evolving hedging strategies. Despite these currency headwinds, the fundamental outlook for the AI hardware stack remains strong, with memory makers in Korea showing significant earnings growth potential through 2026.