AI | Semiconductors | Commodities, Mint Finance

Raghav Vashisht

AI | Semiconductors | Commodities

Deep Fundamental Analysis

Mint Finance

Mint Finance's investment research blends deep fundamental analysis with technical & quant insights. Investment strategies straddle across multiple asset classes with risk management embedded into every trade to deliver an outsized reward-to-risk ratio.

Mint Finance's research is centered around three key themes. First, energy transition and climate change. Second, artificial intelligence. Third, shifting world order with its impact across politics and monetary economics.

Thematic (Sector/Industry)

<ul>
<li>Citi’s claim that AI has triggered the first true semiconductor upcycle in 25 years is partially convincing but also shows signs of overreach.</li>
<li>While ASPs have soared and logic chip margins are inflated, signs of margin compression, overordering, and inventory noise suggest the <em>pricing</em> boom may be peaking.</li>
<li>Investors may need to distinguish between capital-efficient AI bets and overleveraged plays, especially as credit markets begin to price in growing execution and demand risks.</li>
</ul>


Citi’s claim that AI has triggered the first true semiconductor upcycle in 25 years is partially convincing but also shows signs of overreach.
While ASPs have soared and logic chip margins are inflated, signs of margin compression, overordering, and inventory noise suggest the pricing boom may be peaking.
Investors may need to distinguish between capital-efficient AI bets and overleveraged plays, especially as credit markets begin to price in growing execution and demand risks.


Citi’s AI Supercycle Thesis Faces a Logic Check

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/wells-fargo-co" target="_blank" data-smartkarma-citation="entities:232:1" rel="noopener">Wells Fargo &amp; Co (WFC US)</a> reported strong loan growth and much lower credit costs 3Q25</li>
<li>The credit costs from WFC are stepped down, and fully reflected of weekly B/S from Fed data</li>
<li>C&amp;I loans are up a lot, indicative of economic strength, NPL ratio for all loans, are falling more</li>
</ul>



Wells Fargo &amp; Co (WFC US) reported strong loan growth and much lower credit costs 3Q25
The credit costs from WFC are stepped down, and fully reflected of weekly B/S from Fed data
C&amp;I loans are up a lot, indicative of economic strength, NPL ratio for all loans, are falling more


Wells Fargo - Strong Loan Growth and Credit Metrics, in Line with Weekly B/S Data from Fed

<ul>
<li>Weekly data from Fed shows continued strength for banks and the underlying US economy, for data 1 October</li>
<li>Loan loss reserves (LLR) just hit a new low growth rate at 0.72% YoY which should be definitive: credit metrics in US are exceptional, and improving </li>
<li>New loan growth data hit a new high, up 4.86 YoY, sensible given we now have a bit more time passage after rate cut</li>
</ul>


Weekly data from Fed shows continued strength for banks and the underlying US economy, for data 1 October
Loan loss reserves (LLR) just hit a new low growth rate at 0.72% YoY which should be definitive: credit metrics in US are exceptional, and improving 
New loan growth data hit a new high, up 4.86 YoY, sensible given we now have a bit more time passage after rate cut


US Banks - Loan Loss Reserves Growth Hits Low at 0.72% YoY & Loan Growth Hits New High at 4.86%

<ul>
<li>Commercial paper (CP) market is for short-term working capital loans, and growth in most recent week is very strong, up 41% YoY. </li>
<li>We view the CP market as a good view on bank credit demand, underlying credit demand for working capital, which can lead to more investment. </li>
<li>Loan loss reserve (LLR) data is exceptional, in that it is almost not rising at all, with the latest week's growth rate down to just 1.1% YoY</li>
</ul>


Commercial paper (CP) market is for short-term working capital loans, and growth in most recent week is very strong, up 41% YoY. 
We view the CP market as a good view on bank credit demand, underlying credit demand for working capital, which can lead to more investment. 
Loan loss reserve (LLR) data is exceptional, in that it is almost not rising at all, with the latest week's growth rate down to just 1.1% YoY


US Banks - Commercial Paper +41% YoY in Most Recent Week, Loans +4.7%, LLR Growth Dwindles +1.1%

<ul>
<li>Enhanced financial data from the Fed shows off balance sheet loan commitments rising strongly now +3.7% YoY in 2Q25 (quarterly data only, just released)</li>
<li>Data suggests that loan growth we see for US banks (in weekly HFD) is not being driven by off B/S moving on B/S, rather it is true underlying demand</li>
<li>Newly release Probability of Default (PD) for credit card loans in the US is very positive, with thew worst bucket of &gt;20% PD falling to just 3.0% of loans</li>
</ul>


Enhanced financial data from the Fed shows off balance sheet loan commitments rising strongly now +3.7% YoY in 2Q25 (quarterly data only, just released)
Data suggests that loan growth we see for US banks (in weekly HFD) is not being driven by off B/S moving on B/S, rather it is true underlying demand
Newly release Probability of Default (PD) for credit card loans in the US is very positive, with thew worst bucket of &gt;20% PD falling to just 3.0% of loans


US Banks - Off B/S Growth +3.7% YoY in New 2Q25 Data, Credit Card PD Improve Dramatically

United States

Citigroup Inc. is a diversified financial services holding company that provides a broad range of financial services to consumer and corporate customers. The Company services include investment banking, retail brokerage, corporate banking, and cash management products and services. Citigroup serves customers globally.

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Citigroup Inc (C US)

Citi’s AI Supercycle Thesis Faces a Logic Check

Citi believes AI has sparked a semiconductor upcycle, but warnings about potential overreach and pricing peaks still exist. Investors should be...

Mint Finance

Wells Fargo - Strong Loan Growth and Credit Metrics, in Line with Weekly B/S Data from Fed

Strong data out from Wells Fargo for 3Q25 is very much in keeping with the weekly balance sheet data from Fed during the quarter, and as we are...

Daniel Tabbush

US Banks - Loan Loss Reserves Growth Hits Low at 0.72% YoY & Loan Growth Hits New High at 4.86%

New release from the Fed shows loan loss reserves at US banks seeing a lower growth rate that any time in the weekly series, and loan growth is...

Daniel Tabbush

US Banks - Commercial Paper +41% YoY in Most Recent Week, Loans +4.7%, LLR Growth Dwindles +1.1%

Weekly data strengthens in US credit: CP shows 41% growth YoY in outstandings in most recent week. The small 1.1% growth rate of LLR for banks,...

Daniel Tabbush

US Banks - Off B/S Growth +3.7% YoY in New 2Q25 Data, Credit Card PD Improve Dramatically

US bank's off balance sheet data is just out, showing good, improving growth in commitments, suggesting underlying loan growth is real demand, not...

Daniel Tabbush

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Citi’s AI Supercycle Thesis Faces a Logic Check

​Citi believes AI has sparked a semiconductor upcycle, but warnings about potential overreach and pricing peaks still exist. Investors should be...

Mint Finance

Wells Fargo - Strong Loan Growth and Credit Metrics, in Line with Weekly B/S Data from Fed

Strong data out from Wells Fargo for 3Q25 is very much in keeping with the weekly balance sheet data from Fed during the quarter, and as we are...

Daniel Tabbush

US Banks - Loan Loss Reserves Growth Hits Low at 0.72% YoY & Loan Growth Hits New High at 4.86%

New release from the Fed shows loan loss reserves at US banks seeing a lower growth rate that any time in the weekly series, and loan growth is...

Daniel Tabbush

US Banks - Commercial Paper +41% YoY in Most Recent Week, Loans +4.7%, LLR Growth Dwindles +1.1%

Weekly data strengthens in US credit: CP shows 41% growth YoY in outstandings in most recent week. The small 1.1% growth rate of LLR for banks,...

Daniel Tabbush

US Banks - Off B/S Growth +3.7% YoY in New 2Q25 Data, Credit Card PD Improve Dramatically

US bank's off balance sheet data is just out, showing good, improving growth in commitments, suggesting underlying loan growth is real demand, not...

Daniel Tabbush

Citi believes AI has sparked a semiconductor upcycle, but warnings about potential overreach and pricing peaks still exist. Investors should be...