Analysts say AI spending may shift toward inference capacity
European chip stocks opened sharply lower on Monday, tracking declines in Asia, after leaders of some of the largest artificial-intelligence companies said they needed to slow development of the technology. Shares in Dutch chip-equipment supplier ASML Holding fell 4.2%, while smaller peers ASM International and BE Semiconductor Industries both shed more than 6%. German chipmaker Infineon Technologies dropped 6.2%, and Milan-listed shares in STMicroelectronics were down 4%. Other suppliers to the chip industry also fell sharply: France’s Soitec lost 12% and Germany’s Aixtron dropped 7.6%.
Strategists at Deutsche Bank said in a note that the AI lab leaders fell short of calling for a pause in development but that their comments represented one of the clearest acknowledgements yet from within the industry that there might be limits to how fast capabilities can responsibly advance.
Not all analysts read the slowdown signals as bearish for AI-related stocks. James Ooi of Tiger Brokers said calls by Anthropic to pace frontier AI development, alongside similar caution from Sam Altman and Elon Musk, do not necessarily imply a slowdown in AI capital expenditure or a bearish outlook for hardware players. Spending could shift from training the next model toward expanding inference capacity and improving reliability, Ooi said. That shift could also broaden the set of AI beneficiaries beyond hardware vendors and hyperscalers to cybersecurity and observability providers, Ooi added. If regulation and safety requirements grow more important, Ooi said, compliance costs could rise, favoring well-capitalized players such as OpenAI, Anthropic and Google while making it harder for smaller frontier labs to compete on the same footing.
In other analyst notes circulated in the roundup, DBS Group Research analyst Lee Keng Ling said Singapore technology company Venture Corp.’s lifestyle and consumer-products segment, along with its life-sciences segment, are likely to recover in 2027 and support earnings. Venture Corp. is expected to launch a product in the fourth quarter under its lifestyle and consumer-products division, which should support business volume recovery and higher product value, Ling said. The life-sciences segment is stabilizing from a recent downturn and should turn into a growth avenue around 2027, she added. DBS raised its 2026-2028 earnings estimates for Venture Corp. by 4%-5%, raised its target price to 22.90 Singapore dollars from S$21.80, and maintained a buy rating. Venture Corp. shares rose 0.7% to S$16.78.
Separately, Morgan Stanley said Luxshare Precision Industry is likely to be one of the biggest beneficiaries as Apple’s iPhone 18 upgrade cycle unfolds.
In Malaysian telecoms, Kenanga IB analyst Kylie Chan Sze Zan said the share prices of Malaysian mobile network operators are expected to be increasingly driven by earnings and 5G dual-network developments. Chan preferred CelcomDigi over Maxis, with greater scope for earnings to improve as merger-related cost savings are not fully reflected in forecasts. Both operators have sufficient balance-sheet capacity to absorb potential near-term funding needs for Malaysia’s state-backed 5G infrastructure firm Digital Nasional without materially affecting dividends, Chan said. The bigger risk would be recurring funding until Digital Nasional reaches sustainable cash-flow breakeven, she added. Kenanga maintained a neutral rating on Malaysia’s telco sector and rated CelcomDigi at outperform.