As expectations emerge that the Nikkei will continue rising even after a sharp drop in AI stocks, a ¥1 billion investor predicts that a major sector rotation will occur. The investor says the Nikkei could reach ¥80,000 by year-end.
Amid sharp swings in the Nikkei Stock Average, some observers say momentum in AI and semiconductor-related stocks is beginning to change. While buying continues despite concerns about elevated prices, one view presented is that the use of margin trading by individual investors to grow their assets is creating a critical situation in some cases.
Kabuoku Taro (株億太郎), who has built assets worth around ¥1 billion, says valuations of AI-related stocks resemble those seen immediately before the collapse of past bubbles. He notes that, in the current boom, some stocks have reached PBRs of 50x. He expects funds to move into areas outside AI stocks.
He forecasts a major sector rotation driven by inflation and geopolitical risks. He presented a bullish scenario in which the Nikkei continues rising even after AI stocks collapse and approaches ¥80,000 by year-end.
The “next core sectors” to watch from this point include areas supported by a recovery in demand for AI, IoT and data centers, as well as fluctuations in demand for servers used in data centers and the expansion of the generative AI market.