Joshua Crabb, Asia-Pacific Head of Equities at Robeco Asset Management, and Chris Berkouwer, Global Equity Portfolio Manager at Robeco, presented their global stock market outlook at a briefing held on the morning of May 14 in Yeouido, Seoul. The executives recommended that investors diversify from concentrated positions in certain technology stocks into undervalued Asian markets and non-technology sectors including healthcare, consumer goods, and financials. The briefing addressed current market conditions where investment weight has become excessively concentrated in select tech stocks despite continued AI-related momentum. Crabb stated that while risk appetite remains strong in global equity markets and corporate earnings outlook revisions are robust, investors should reduce exposure to stocks that have risen rapidly and expand into sectors that have not received market attention.
Robeco Identifies Valuation Advantages in Asian Markets
Crabb assessed that Asian stock market valuations remain attractive. He explained that US stocks have limited room for further revaluation while Asian markets have revaluation potential. Korean and Taiwanese technology stocks are leading upward revisions in earnings outlook for Asian emerging markets, with Japan also contributing. Crabb stated that the key issue is not the slowdown in corporate profit margins itself but the speed of decline, noting that what matters is whether rapid earnings deceleration leads to economic recession.
AI Investment Cycle Expands Beyond GPU to Physical AI
The Robeco executives projected that the AI investment cycle is expanding from graphics processing units (GPU) to high bandwidth memory (HBM), robotics, and automation — areas they termed "physical AI." This expansion is expected to broaden the range of beneficiary companies in Korea and Taiwan. Berkouwer stated that AI-related expectations and earnings outlook remain strong and the growth trajectory will continue for several years ahead. He clarified that the recommendation does not mean abandoning AI investments entirely.
Robeco Recommends Portfolio Diversification Strategy
Crabb warned that concentration in global technology stocks requires caution. He stated that when AI faces pressure, opportunities in other sectors such as consumer goods, healthcare, and financials can become prominent, adding that investors need to include companies with solid earnings growth even if they have low direct AI relevance. Berkouwer disclosed that Robeco has reduced positions in stocks that rose rapidly in recent months and expanded exposure to sectors including healthcare. He explained that investors should maintain AI exposure while realizing some profits and diversifying into companies that have not received market attention.
Korean Market Strengths Extend Beyond Semiconductors
Crabb highlighted Korea's competitiveness beyond semiconductors. He stated that Korea's strong export performance cannot be explained by semiconductor chips alone, evaluating that export growth in transformers, shipbuilding, and robotics will benefit the stock market. The executive suggested that if the upward momentum of AI leading stocks slows, corporate value enhancement policies such as dividends and share buybacks may attract renewed attention. Berkouwer analyzed that recent high volatility in the Korean stock market stemmed from price momentum and amplified investor sentiment rather than corporate earnings, warning that actual downward revisions in corporate earnings outlook would constitute a more serious risk signal.
FAQ
What did Robeco recommend at the May 14 briefing in Seoul?
Robeco executives recommended that investors diversify from concentrated positions in certain technology stocks into undervalued Asian markets and non-technology sectors including healthcare, consumer goods, and financials. They advised reducing exposure to stocks that rose rapidly while maintaining AI investment but realizing some profits.
Why does Robeco view Asian stock markets as attractive?
Crabb stated that US stocks have limited room for further revaluation while Asian markets have revaluation potential. He noted that Korean and Taiwanese technology stocks are leading upward earnings outlook revisions for Asian emerging markets, and Asian valuations remain attractive compared to US markets.
