PremiumRecord Profits, Red Screens: Goldman Admits The AI Boom Has Become A Cost-Of-Capital Problem
Samsung just printed the biggest quarterly operating profit in its history. TSMC just booked its biggest quarter ever. Asia sold off anyway. Samsung's preliminary Q3 operating profit came in at ₩107.4 trillion (about $80 billion), its first quarter above ₩100 trillion, and TSMC's Q3 revenue hit a record NT$1.49 trillion (US$46.7 billion), roughly 50% higher year on year and above the top end of guidance. The Nikkei fell about 1.4%, the KOSPI kept sliding and Taiwan was weaker too. Goldman's Rich Privorotsky, in this morning's "GS Basics - Crowding Out. TSMC/Samsung. Cyclicals/RSP." (available to pro subs), explains why:
"Oil back above $103, US 10yr around 5.3%, and the Fed minutes reinforcing the prospect of another hike later this year. The juxtaposition is pretty remarkable… the AI micro continues to accelerate while the macro backdrop gets progressively more difficult. Strong earnings simply aren't enough to offset the pressure from rates, energy and capital supply." (emphasis ours)