Chips surge: Samsung strike averted, Micron $1625, EM records.

Transcript

Tom Buddy, chips are on fire this morning — Samsung strike called off and UBS says Micron can double again. No way this rally is slowing.

Marie Good morning and welcome to Investment Flash's London Edition, Wednesday, May twenty-seventh, twenty twenty-six. I'm Marie, joined by Tom and Gerald.

Gerald Tom, you sound like you've already spent your bonus. But yeah look, Samsung's union approving that deal — that's a real supply chain relief.

Tom I mean, Gerald, come on — the world's largest memory-chip maker, no strike, and those bonuses averaging three hundred forty grand. That's a massive overhang gone.

Marie And it's not just Samsung. UBS slapped a sixteen hundred twenty-five dollar target on Micron — that's more than double from here. Forward P-E of eight point six times, Tom? That's almost value territory for an AI memory play.

Gerald Alright, hold on — eight point six times on earnings that are arguably at peak cycle. I love a cheap multiple, but memory is notoriously cyclical. Marie, you really think this time is different?

Marie Look, the demand isn't just cyclical — it's AI infrastructure buildout. Hyperscalers are locking in long-term supply agreements. That's structural, not just a blip.

Tom Exactly — that's what UBS is betting on: a re-rating because of those long-term deals. And buddy, Micron was up nineteen percent last session, up one hundred eighty-four percent year to date. The momentum is screaming.

Marie Right —

Gerald Yeah, lock it in.

Tom Remember yesterday we said buy semiconductors? Micron alone just validated that call.

Gerald To be fair, Tom, you've been banging that drum for months. But I'll give you credit — the AI trade has gone global. Marie, tell us about Taiwan.

Marie Emerging market stocks rose for a fourth day, powered by Korea and Taiwan. Taiwan's market cap just overtook India's for the first time. That's historic — AI semiconductor demand is redrawing the map.

Tom The Taiwan ETF — up nearly fourteen percent in a week, fifty-seven percent year to date. And the South Korea ETF? Up ninety-six percent year to date, at a record. The AI trade has fully globalized.

Gerald Look mate, up ninety-six percent in five months — that's not just momentum, that's a crowd. The positioning in Korea is extreme. When everyone's on one side, I get nervous.

Marie I'm going to push back here. Yes, it's crowded, but the fundamentals are there. The Samsung deal removes a supply risk that could have squeezed the whole sector. AI demand isn't slowing.

Tom Right — and the emerging markets ETF, E-E-M, added six point four percent in a week. AI is overriding geopolitics. Iran uncertainties? Who cares when chips are booming.

Gerald Alright, fair enough. But I'd rather play the commodity side of this AI buildout. Did you see SQM boosted its lithium guidance? Not just EVs, but battery storage systems.

Marie Sociedad Quimica — that's a smart call. A forward P-E of fourteen point four, and still eighteen percent below its fifty-two-week high. If lithium demand is truly structural, there's room.

Tom And the lithium ETF jumped five point six percent in a week. Batteries aren't just for cars anymore — grid storage is the quiet boom.

Gerald Exactly. It's not as flashy as chips, but it's the picks and shovels of the energy transition. And the valuation isn't stretched. That's my kind of trade.

Marie Speaking of not flashy, gold options are flashing bullish. CNBC reports a surge in call buying on the gold ETF and gold miners.

Tom Gold? Really? The metal's been sideways. But the miner ETF shot up four point one percent last session, and it's still a quarter below its high. That options flow is a contrarian signal, buddy.

Gerald To be fair, gold makes sense if you're worried about the dollar or rates. But I'm not seeing a macro catalyst yet. The bond market is quiet, VIX is at seventeen.

Marie Wait — wait a second. The gold trade might be hedging something else. If oil keeps sliding, maybe a growth scare. The United States Oil Fund slumped two point eight percent and is down ten percent for the week.

Tom Oil's got two bearish signals: China injecting reserves to cap prices, and a potential Iran peace deal. Crude could fall to seventy or eighty dollars, says one analyst.

Gerald And the homebuilders are getting squeezed by input costs. Copper near a fifty-two-week high, lumber up, diesel and aluminum rising. A typical US home has over four hundred pounds of copper. Margins are getting crushed.

Marie The copper ETF is only four percent below its high, while homebuilder ETFs are down year to date and well below their peaks. The market is pricing this headwind already.

Tom So the pair trade is clear: long copper, short homebuilders. That's the cross-cutting theme in today's digests.

Gerald Hang on, Tom — you're not just chasing chips? This old-economy inflation trade is actually the one with less room for disappointment. Love it.

Tom Hey, I can multitask. But seriously, the homebuilder ETF is seventeen percent below its high, and the copper story is about supply tightness in a housing boom.

Marie And then there's the EU defense push. Airbus could benefit if Europe standardizes procurement. But the stock is still down sixteen percent year to date, twenty-three percent below its high. That's a policy call.

Gerald Yeah look, the FT had that story. The EU defence chief wants to stop bespoke missiles and share stockpiles with Ukraine. It's sensible, but until contracts are signed, it's just rhetoric.

Marie But Gerald, the US is pulling back from Europe. This could be a game-changer for European defense contractors. Airbus's defense unit could see a re-rating if the policy turns real.

Tom I'm watching it. But for now, chips are still the main event. And the most original take today? That Venezuela bond play — a distressed debt investor who bought after default and is now reaping rewards as political hopes rise.

Marie That's classic contrarian value. Buying when liquidity dries up and everyone else is fleeing. Tina Vandersteel's bet is paying off, but it's not for the faint of heart.

Gerald To be fair, that's the kind of trade that makes my heart sing. But you need a strong stomach. Most investors can't handle that volatility.

Tom Alright, let's synthesize our view. Today's signals are a full-throated cheer for chips. But we have to acknowledge the crowding risk — South Korea ETF two hundred thirty-three percent above its low.

Marie And oil's slide is a cautionary note. If it continues, it might signal a broader growth scare that hits risk assets. Plus, the dollar and rates are quiet — too quiet.

Gerald The macro backdrop hasn't resolved. The long-term Treasury ETF is barely holding above its low, VIX is whisper-quiet. A dovish Fed shift or tariff escalation could flip the script.

Marie What's missing from the coverage is earnings revisions outside chips. For the broad market, euphoria could be a late-cycle signal. That story is buried.

Tom So the cleanest trade might be long copper, short homebuilders. Old-economy inflation with less room for disappointment, as Gerald said.

Gerald One hundred percent.

Marie That's the pair.

Tom Nailed it.

Marie And as always, none of this is investment advice. Do your own research.

Gerald We're back later today for the New York Edition, nine a.m. New York time. Tom, you'll be up for the opening bell?

Tom You know it, buddy. Chip rally isn't sleeping.

Marie If you're just finding us, hit follow on Spotify and check investmentflash.com for the full digest with charts and sources. See you in a few hours.