Adrian Mowat Flags AI Chip Rally Reality Check

Reporting by The Economic Times on June 29, 2026 attributed to EM-equity strategist Adrian Mowat the view that South Korean chip stocks are undergoing a temporary dip rather than an AI bubble bursting, with the recent volatility driven by strong earnings revisions from tight chip supply and demand. Mowat framed the "next phase" as requiring companies to show measurable AI-driven revenue growth and cost reductions, and said Indian IT firms could see sentiment improve by demonstrating concrete AI benefits to clients. His comments followed a genuinely turbulent stretch for the sector: Bloomberg and CNN reported the KOSPI fell as much as 8 to 10% in single sessions in late June, triggering a circuit breaker, as investors unwound crowded AI and semiconductor positions; commentators noted that with two chipmakers representing roughly 40% of the benchmark index, the KOSPI has effectively become a concentrated semiconductor bet.

Practitioners managing AI-hardware procurement or infrastructure budgets should treat this volatility as a change in external risk signal, not a verdict on the technology: periods of tight supply and demand can produce earnings revisions that outrun the underlying revenue evidence, so architecture and purchasing decisions made during peak-price windows can lock in higher costs. Track fab utilization and capacity guidance from major manufacturers, and watch for AI-specific revenue and cost-saving line items in earnings reports, the metric Mowat says will determine whether current valuations hold.

Watch whether large Indian IT vendors report client outcomes explicitly tied to AI deployments, the sentiment lever The Economic Times highlights, and whether South Korean chipmakers' next earnings show AI-capex converting into durable product revenue rather than just supply-driven pricing power.