# Investors Weigh AI Trade, Japan's Startup Ecosystem

An episode of [Bloomberg Daybreak: Asia Edition](https://invisiblenetwork.ai/podcast/1663863437), 2 Jul 2026, 18 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/58e85be7-dbb5-4043-afed-af80014dc0b3/30fdb3ad-456b-45d0-ab57-b47b00152253/audio.mp3?utm_source=Podcast&in_playlist=27143354-63aa-4ac5-965d-af80014dc0d3

Business and finance news from the Asia-Pacific. In the equity market, a selloff in US chipmakers reignited concerns that the artificial intelligence-driven rally has outpaced fundamentals. We speak to Jeff Buchbinder, Chief Equity Strategist for LPL Financial. Plus - We go to Japan, where one of its largest startup conferences, IVS 2026 is underway. Investors, major corporations, entrepreneur are gathering up to discuss the renewed strength and competitive ness of Japan's startups. Bloomberg's Haidi Stroud-Watts spoke to Clarey Zhu, a Growth Partner at Headline. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
[0:10] Speaker 2: Welcome to the Daybreak Asia podcast. I'm Doug Chrisner. Today
[0:14] Speaker 2: the US equity markets love affair with tech seemed to
[0:17] Speaker 2: cool again. We had the Philadelphia Semiconductor Index down by
[0:21] Speaker 2: more than six percent, but on the other hand, economically
[0:23] Speaker 2: sensitive stocks outperformed, especially the financials. The KBW Bank Index
[0:29] Speaker 2: was up today by one point eight percent. To be fair,
[0:32] Speaker 2: volume was on the light side as we approach Friday's
[0:35] Speaker 2: Independence holiday. For a closer look at market action, I'm
[0:38] Speaker 2: joined by Jeff Bookbinder. He is the chief equity strategist
[0:42] Speaker 2: at LPL Financial. Jeff, thank you for being here. In
[0:46] Speaker 2: terms of the tech trade, how are you evaluating the
[0:49] Speaker 2: current landscape right now?
[0:52] Speaker 3: Yeah, well, we're still constructive on tech, but did pair
[0:56] Speaker 3: back our recommended exposure a little bit in early June.
[1:00] Speaker 3: We spend a lot of time looking at positioning and sentiment,
[1:05] Speaker 3: and certainly the tech trade got a little bit overheated
[1:09] Speaker 3: on a short term basis in early June, so we
[1:12] Speaker 3: pared back our overweight to a neutral and are waiting
[1:15] Speaker 3: for a more attractive opportunity. There is no doubt that
[1:19] Speaker 3: the earning strength is going to power this sector higher
[1:24] Speaker 3: in the second half and into twenty twenty seven in
[1:27] Speaker 3: our minds, but we're going to have more ups and
[1:30] Speaker 3: downs as the market debates the profitability of the AI
[1:35] Speaker 3: infrastructure build out. We're going to get more scrutiny during
[1:38] Speaker 3: this upcoming earning season. If these companies can't deliver the
[1:42] Speaker 3: kind of returns that investors want, we think we're in
[1:45] Speaker 3: for a little bit more volatility. So that's something to watch.
[1:49] Speaker 3: But the growth there is really remarkable.
[1:52] Speaker 2: So as we know. The ECB's annual forum in Central
[1:56] Speaker 2: Portugal wrapped up on Wednesday, and there was one one
[2:00] Speaker 2: question that was particularly dominant. Is AI a boon or
[2:05] Speaker 2: a threat to the global economy? Now? Economists there laid
[2:08] Speaker 2: out a number of reasons to be worried, and I
[2:10] Speaker 2: want to get your view. Two come to mind. One
[2:13] Speaker 2: is rising debt issuance from hyperscalers, and another, which may
[2:18] Speaker 2: be a little bit more problematic for the market in
[2:20] Speaker 2: the near term, is the increasing use of leverage by
[2:24] Speaker 2: investors who are betting on AI. Do those economists have
[2:27] Speaker 2: a point and if they do, are you concerned at
[2:30] Speaker 2: all by those issues?
[2:33] Speaker 4: Yeah?
[2:33] Speaker 3: Absolutely. In fact, the next correction in this market could
[2:38] Speaker 3: very well be caused by the market pushing back on
[2:43] Speaker 3: the hyperscaler investments. Right right now, the earnings are coming through,
[2:48] Speaker 3: but if the cash flow gets increasingly strained and these
[2:51] Speaker 3: companies have to raise more debt, the scrutiny on the
[2:55] Speaker 3: returns on these investments will increase, and that is the
[3:00] Speaker 3: formula for more volatility. Certainly, so we're watching adoption of AI.
[3:06] Speaker 3: We're watching the use cases for Corporate America to see
[3:11] Speaker 3: if they can drive the margin expansion that analysts want
[3:15] Speaker 3: to see. Certainly that expansion is being factored into estimates.
[3:20] Speaker 3: If companies start to deliver that margin expansion and validate
[3:24] Speaker 3: the investment that these hyperscillers are making in AI, then
[3:27] Speaker 3: we think the market will hold up just fine. But
[3:30] Speaker 3: that is absolutely something to be worried about. And then
[3:33] Speaker 3: in terms of leverage, that is certainly something to pay
[3:37] Speaker 3: attention to. It is likely to exaggerate volatility, and again
[3:41] Speaker 3: that volatility could come from this push and pull. The
[3:45] Speaker 3: market just doesn't know right now whether this spending is
[3:47] Speaker 3: going to pay off. That may not be reconciled until
[3:51] Speaker 3: twenty twenty seven, but for now, more likely to see
[3:56] Speaker 3: some ups and downs for tech, and just like we
[3:59] Speaker 3: saw here over the last couple of weeks, we probably
[4:02] Speaker 3: going to see some rotation into the other areas of
[4:04] Speaker 3: the market outside of tech.
[4:06] Speaker 2: So the market for these leveraged ETFs has blossomed into
[4:10] Speaker 2: a two hundred and seventy billion dollar business. And there's
[4:13] Speaker 2: one leveraged ETF in particular that launched in Hong Kong.
[4:18] Speaker 2: This is the CSOP sk Heinex leveraged ETF. It launched
[4:23] Speaker 2: nine months ago. It's now a thirteen billion dollar fund,
[4:27] Speaker 2: the biggest of its kind anywhere. And this is the
[4:31] Speaker 2: type of situation that I'm trying to tease out here
[4:33] Speaker 2: where you could get some price action that moves against
[4:37] Speaker 2: a name like sk Heinex that could create kind of
[4:41] Speaker 2: a cascading effect when it comes to these ETFs, and
[4:44] Speaker 2: I'm trying to get a sense of what the risk
[4:47] Speaker 2: is for the market in that type of situation.
[4:51] Speaker 3: Sure that is going to exaggerate the moves in both directions,
[4:56] Speaker 3: and so what might be you know, a ten percent
[4:59] Speaker 3: pullback could end up being fifteen or twenty once this
[5:03] Speaker 3: cycle starts to show signs of turning south. We don't
[5:07] Speaker 3: know when that will be, of course, but when we
[5:09] Speaker 3: get it. The areas that have been strongest are probably
[5:13] Speaker 3: going to see the biggest declines, and if you've got
[5:15] Speaker 3: leverage in those areas, potentially the memory makers, that's where
[5:20] Speaker 3: some of the biggest moves have been. That's where you
[5:22] Speaker 3: could see the biggest declines. But it's just really hard
[5:25] Speaker 3: to say. The market is certainly pretty confident here that
[5:29] Speaker 3: there'll be a shortage of memory through twenty twenty seven.
[5:33] Speaker 3: The market looks ahead. That means we certainly could see
[5:38] Speaker 3: some of that leverage really come back to herd investors
[5:41] Speaker 3: and traders over the next six months.
[5:44] Speaker 2: And that shortage of memory, I think we can agree
[5:46] Speaker 2: is going to contribute to rising inflation. In the last week,
[5:49] Speaker 2: we had both Apple and Microsoft talking about the fact
[5:51] Speaker 2: that they have been forced to raise prices on some
[5:55] Speaker 2: of their products in order to protect margin. So I
[5:59] Speaker 2: know we've been looking looking at what's been happening in
[6:02] Speaker 2: terms of war with Iran as a primary driver of
[6:06] Speaker 2: inflationary pressures as it relates to the energy complex. But
[6:09] Speaker 2: I think now the market's really dealing with this fact
[6:12] Speaker 2: that when you have a shortage, a global shortage of memory,
[6:16] Speaker 2: this is producing inflationary pressure in and of itself.
[6:23] Speaker 3: As you look to earning season starting here in just
[6:26] Speaker 3: a couple of weeks, tech's going to have a little
[6:29] Speaker 3: bit of a challenge there. Right, we're still going to
[6:31] Speaker 3: get probably fifty sixty percent earnings growth out of the
[6:36] Speaker 3: AI names and the tech sector in particular, but that
[6:40] Speaker 3: doesn't mean that companies are going to be confident guiding
[6:43] Speaker 3: to margin expansion because of the memory price issue alongside
[6:47] Speaker 3: the other sticky inflation. So yes, that is absolutely a
[6:51] Speaker 3: risk here and why we think it makes sense for
[6:54] Speaker 3: investors to just factor in a little bit less of
[6:58] Speaker 3: a rally here in the second half. So maybe we'll
[7:01] Speaker 3: get load and mid single digit returns on top of
[7:05] Speaker 3: where we are right now, but we don't think we're
[7:07] Speaker 3: going to do quite as well in the second half
[7:10] Speaker 3: as we did in the first, and that sticky inflation
[7:13] Speaker 3: is one reason why.
[7:15] Speaker 2: Let's talk a little bit about the IPO market. Last
[7:18] Speaker 2: week there were reports that open ai was going to
[7:20] Speaker 2: shelve its IPO and maybe push it off into the
[7:24] Speaker 2: next year just because of what's been happening in the
[7:26] Speaker 2: overall market. And today we had indications that the Franco
[7:30] Speaker 2: German tank maker KNDS postponed its IPO. There's been a
[7:36] Speaker 2: little bit of volatility in the market for European defense contractors.
[7:41] Speaker 2: Give me your sense as to what we're seeing play
[7:44] Speaker 2: out in terms of some of these IPOs and the
[7:46] Speaker 2: degree to which companies may be withholding initial public offerings
[7:51] Speaker 2: right now just because of the volatility that's been happening
[7:55] Speaker 2: in markets or the level of uncertainty that's there.
[8:00] Speaker 3: Well, we just have a lot of issuance coming all
[8:03] Speaker 3: at one time. This will be the biggest year ever
[8:07] Speaker 3: almost certainly in terms of dollar issuance for IPOs. Of course,
[8:13] Speaker 3: SpaceX was first, and Anthropic and Opening Eye coming likely
[8:17] Speaker 3: either the second half or potentially early twenty twenty seven.
[8:22] Speaker 3: Spreading that out is probably a good thing just so
[8:24] Speaker 3: the market can digest it a little bit more easily.
[8:28] Speaker 3: But the numbers aren't going to be dramatically higher than
[8:31] Speaker 3: what the market had to deal with in twenty twenty one,
[8:35] Speaker 3: And of course the bear market in twenty twenty two
[8:37] Speaker 3: was really more about interest rates and inflation than IPO issuance.
[8:43] Speaker 3: So it's it's certainly something that could slow the market
[8:48] Speaker 3: down just a bit because investors, of course have to
[8:51] Speaker 3: raise those funds if they want to participate in those deals.
[8:55] Speaker 3: But at the same time, we want to see a
[8:57] Speaker 3: market that's conducive to bringing those deals out. We want
[9:02] Speaker 3: confidence in AI. We want that investment to come through
[9:06] Speaker 3: and drive earnings, but you don't want the market to
[9:09] Speaker 3: be overheated. And if these deals came too fast and
[9:13] Speaker 3: generated returns that suggest that they're way out over their skis,
[9:20] Speaker 3: that would give us a little bit of a pause. So, yeah,
[9:22] Speaker 3: that's absolutely something to watch in a risk here, particularly
[9:26] Speaker 3: in tech as we look ahead to the second half.
[9:29] Speaker 2: So I was mentioning at the top the rotation that
[9:31] Speaker 2: we had out of tech and into financials. How are
[9:34] Speaker 2: you feeling about the big banks.
[9:37] Speaker 3: Yeah, we like them as a signal of a healthy
[9:41] Speaker 3: capital markets environment. But we actually think industrials right now
[9:49] Speaker 3: are better position for upside in the second half riding
[9:52] Speaker 3: this AI way. This spending is just so massive. We
[9:56] Speaker 3: could potentially get a trillion dollars in capex in twenty
[10:00] Speaker 3: twenty seven. We think you want to take advantage of
[10:03] Speaker 3: that in the second half of twenty twenty six, So
[10:06] Speaker 3: we like industrials as a way to do that. Certainly
[10:09] Speaker 3: did not get as overheated as the semiconductor names have
[10:13] Speaker 3: gotten so that's really an area of focus. But certainly
[10:16] Speaker 3: the bank should participate in a rising market in the
[10:20] Speaker 3: second half. Certainly a better macro picture if we get
[10:26] Speaker 3: oil prices to stay where they are or move lower,
[10:30] Speaker 3: would help quite a bit. So, you know, lending has
[10:32] Speaker 3: been pretty good. We have a neutral on financials, so
[10:37] Speaker 3: we certainly don't dislike it, but we just think they
[10:40] Speaker 3: are better opportunities to take advantage of stronger earnings growth elsewhere.
[10:45] Speaker 2: Okay, Jeff, we'll leave it there, Thank you so very much.
[10:47] Speaker 2: Jeff Bookbinder. He is chief equity strategist at LPL Financial.
[10:51] Speaker 2: Joining us here on the Daybreak Asia podcast. Welcome back
[11:01] Speaker 2: to the Daybreak Asia Podcast. I'm Douk Krisner. We go
[11:04] Speaker 2: to Japan next, where one of the largest startup conferences,
[11:08] Speaker 2: the IVS twenty twenty six, is underway. Investors as well
[11:12] Speaker 2: as major corporations along with entrepreneurs are all gathering to
[11:16] Speaker 2: discuss the renewed strength and competitiveness in Japanese startups. And
[11:21] Speaker 2: that's where we had the chance to speak with clariy Ju.
[11:24] Speaker 2: Clarie is a growth partner at Headline. She spoke to
[11:27] Speaker 2: Bloomberg TV host, Heidi Stroud Watts, it is, you know.
[11:31] Speaker 1: Perhaps underplay a pretty exciting time to be in this space,
[11:34] Speaker 1: particularly in Asia. What are you looking at in terms
[11:37] Speaker 1: of the more untapped opportunities given how far the exuberance
[11:41] Speaker 1: and the rallies have run on.
[11:46] Speaker 4: For sure, we're seeing multiple very exciting themes that are
[11:50] Speaker 4: the come West structural benefits, especially Asia areas that are
[11:56] Speaker 4: areas that include infrastructure, energy, transition, deep tech, robotics, and
[12:03] Speaker 4: consumer I would say these areas. Asia definitely has a
[12:07] Speaker 4: lot of strong advantages versus other regions in the world, and.
[12:12] Speaker 5: Obviously a lot of them would be the usual suspects Korea, Japan, Taiwan,
[12:17] Speaker 5: for example, But tell us about sort of where you're
[12:19] Speaker 5: spreading your attention in terms of some of these key markets.
[12:25] Speaker 4: For sure, now in the AI era, we're seeing exceptional
[12:29] Speaker 4: entrepreneurs starting out from really anywhere in the world. Those
[12:33] Speaker 4: markets you mentioned definitely have very strong history, and we're
[12:36] Speaker 4: also seeing founders from other markets such as Southeast Asia,
[12:41] Speaker 4: other areas and as well as like Asian founders in
[12:44] Speaker 4: other parts of the world. Super exciting time, and these
[12:47] Speaker 4: days exceptional entrepreneurs also have larger and more global ambitions
[12:52] Speaker 4: than before at headline with our deep local networks as
[12:56] Speaker 4: well as like the broader global platform. We're super excited
[13:00] Speaker 4: to support these founders as they scale to the nest
[13:03] Speaker 4: face on the global stage.
[13:06] Speaker 1: How do you feel about valuations at the moment, because
[13:08] Speaker 1: obviously these areas, these sectors are really hot at the
[13:13] Speaker 1: moment right and there's a lot of fundraising going on
[13:16] Speaker 1: both in public and private markets. Do you think that's
[13:18] Speaker 1: impacting how investors are feeling in terms of sentiment.
[13:25] Speaker 4: Yeah, investors are definitely super polish right now, but we're
[13:29] Speaker 4: also seeing a bifurcation in terms of valuation multiples. People
[13:33] Speaker 4: are starting to be more softfle and rigorous around the
[13:37] Speaker 4: potential AI winners versus not. And then you also see
[13:42] Speaker 4: the bifurcation increasing across different segments and areas like memberships
[13:48] Speaker 4: and others have been surging quite a bit, and versus
[13:52] Speaker 4: the SAS apocalypse from several months earlier this year, you
[13:56] Speaker 4: see that kind of sustaining at a lower level. Definitely,
[14:00] Speaker 4: I would say people have like strong views in certain
[14:04] Speaker 4: areas versus others.
[14:05] Speaker 1: For sure, China has perhaps perhaps gotten less attention when
[14:12] Speaker 1: it comes to its own AI ecosystem but do you
[14:14] Speaker 1: see lots of opportunities in that market.
[14:19] Speaker 4: In China, maland.
[14:24] Speaker 1: Both on shore and offshore.
[14:28] Speaker 4: Great, Yes, definitely. Uh. You know, China and offshore has
[14:33] Speaker 4: been a critical anchor for a lot of the physical
[14:36] Speaker 4: AI value chain, you know, across areas such as robotics,
[14:41] Speaker 4: deep tag and different areas and as smart manufacturing. For sure,
[14:46] Speaker 4: we're seeing more efforts there. And I would say, you know,
[14:50] Speaker 4: China on shore and offshore has also taken a more
[14:54] Speaker 4: productmatic approach to AI, that is more production oriented, that's
[14:59] Speaker 4: more deeply rooted in the hardware ecosystem advantage In terms
[15:06] Speaker 4: of the vehicles across Asia, the US, Europe, Latin as well,
[15:11] Speaker 4: how distributed is the focus across each of those opportunity markets. Yes,
[15:19] Speaker 4: it's a great question. On the early stage side, at Headline,
[15:22] Speaker 4: we have four different vehicles across Asia, the US, Europe,
[15:27] Speaker 4: and Latin, and we have local offices across Tokyo, Taipei,
[15:32] Speaker 4: San Francisco, five offices in Europe as well as Apollo.
[15:36] Speaker 4: On the girl stage side, we have one global fund
[15:39] Speaker 4: that essentially sitts on top of these early stage funds.
[15:42] Speaker 4: We'll leverage in size and on the ground partnerships around
[15:45] Speaker 4: the world to back the most promising entrepreneurs during the
[15:49] Speaker 4: scale up phase. So I would say were we keep
[15:53] Speaker 4: our eyes wide open in terms of looking for opportunities
[15:57] Speaker 4: and entrepreneurs around the world, and we help them with
[16:00] Speaker 4: their nest phase of international expansion.
[16:04] Speaker 1: You've got a lot of players jostling for fundraising at
[16:07] Speaker 1: the moment. Obviously with the massive SpaceX Ipo, We've talked
[16:11] Speaker 1: a little bit about some of the other AI companies
[16:13] Speaker 1: that are headed down that path as well, and even
[16:16] Speaker 1: additional rounds of fundraising by the likes of Alphabet Right.
[16:19] Speaker 1: Is it getting crowded and our investors becoming a little
[16:22] Speaker 1: bit nervous, particularly in light of the previous rounds of
[16:26] Speaker 1: sell offs that we've seen in these markets.
[16:31] Speaker 4: Yes, I would say, you know, the excitement is backed
[16:34] Speaker 4: by people's conviction and in studism, the ground gross power
[16:38] Speaker 4: respects of these companies, and it's hard to generalize, but
[16:42] Speaker 4: you know, they all have their strong gross drivers that
[16:46] Speaker 4: you know that separately help like their contributing factors. But yeah,
[16:50] Speaker 4: I would say people are having more of a consensus
[16:53] Speaker 4: viewed more concentrated in several concentrated names today than you
[16:58] Speaker 4: know in the past decade, and you see again the
[17:02] Speaker 4: strong bifurcation between the winners getting ever bigger and versus
[17:07] Speaker 4: the smaller, more points solution companies probably getting less attention.
[17:11] Speaker 2: That was Clarie Ju, growth partner at Headline, speaking to
[17:14] Speaker 2: Bloomberg's Heidi Stroud Watts, bringing you their conversation here on
[17:18] Speaker 2: the Daybreak Asia Podcast. Thanks for listening to today's episode
[17:24] Speaker 2: of the Bloomberg Daybreak Asia Edition podcast. Each weekday, we
[17:28] Speaker 2: look at the story shaping markets, finance, and geopolitics in
[17:32] Speaker 2: the Asia Pacific. You can find us on Apple, Spotify,
[17:35] Speaker 2: the Bloomberg Podcast YouTube channel, or anywhere else you listen.
[17:39] Speaker 2: Join us again tomorrow for insight on the market moves
[17:42] Speaker 2: from Hong Kong to Singapore and Australia. I'm Doug Prisner,
[17:47] Speaker 2: and this is Bloomberg

Shows are listed from Apple Podcasts' charts and directory, and Podcast Index where it is used. Every show and episode belongs to its publisher and plays from the publisher's own feed; this site hosts none of them.