Capital Macro: If the US AI bubble bursts, Asian emerging markets are likely to be affected.

Kai Tuo Macro stated in a report that the AI bubble in emerging market stocks has not yet burst, and it may further expand next year. Market economist Elias Hilmer said, "Although the valuations of emerging market stocks have generally increased this year, they are still generally lower than those in the United States." He added that the huge valuation gap between emerging markets and US AI stocks is not expected to narrow significantly next year. However, if the AI bubble bursts in 2027 as predicted by Kai Tuo Macro, the lower valuations in emerging markets are unlikely to provide much cushion. In this scenario, Taiwan and South Korea will face significant corrections. He said that if there is sustained correction in global markets after the burst of the bubble, the continuously rising risk premium will put pressure on emerging markets in Asia, mainly consisting of technology stocks.