Across APAC, the hottest trades of 2025 have a common theme: AI, EVs, and semiconductors. From Taiwan’s chip giants to South Korea’s battery leaders and Japan’s robotics innovators, investors are pouring in, driven not just by earnings reports, but by fear of missing out (FOMO).
It’s an intoxicating mix of technology hype, national pride, and market momentum. But while FOMO can drive spectacular rallies, history shows it can also tempt investors into missteps, especially when fundamentals are overlooked and allocations become lopsided.
AI is billed as the “next industrial revolution.” EV adoption is accelerating thanks to government policy and consumer demand. Semiconductors remain the backbone of modern economies, with supply chains in the spotlight.
These sectors offer compelling long-term narratives, and APAC sits at the heart of them. Taiwan’s TSMC supplies chips to the world. South Korea’s Samsung and LG Energy Solution lead in memory and EV batteries, and Japan’s robotics and automation expertise is surging in demand.
For investors, these are not just companies - they’re national champions. That combination of global leadership and local pride can amplify momentum, particularly among retail traders and even institutions under pressure to match benchmarks.
When prices rise quickly, the temptation is to “ride the wave” by increasing exposure. The problem? FOMO often pushes investors to over-allocate to hot sectors, leaving portfolios dangerously concentrated.
We’ve seen this before: in 2021 with green energy stocks, in 2020 with pandemic tech winners, and in 2000 with dot-coms. Each time, investors who chased without discipline faced sharp drawdowns when momentum reversed.
Momentum can take prices far above intrinsic value, but eventually earnings, cash flow, and competitive advantage reassert themselves. Without these anchors, valuations become fragile.
Key questions to ask before committing more capital:
· Is revenue growth supported by real demand, or just sentiment?
· Are margins expanding sustainably, or propped up by temporary conditions?
· Do forward earnings or pricing in perfection justify the valuation?
In AI, EVs, and chips, it’s easy to be swept away by innovation headlines. But the companies that will thrive long-term are those with durable advantages, sound balance sheets, and the ability to reinvest at high returns.
Rather than swinging portfolios heavily into one theme, disciplined investors scale exposure in proportion to conviction and risk.
Practical allocation approaches:
· Cap sector weightings to avoid single-theme vulnerability.
· Use staggered entry points to average in, avoiding buying only at peaks.
· Pair growth allocations with defensive assets to smooth volatility.
· Review portfolio concentration quarterly - enthusiasm has a way of creeping higher unnoticed.
Yes, APAC’s tech leaders have genuine long-term growth potential. The world will need more chips, smarter AI, and cleaner transport. But investor returns depend not only on what you buy, but when and how much.
By keeping one eye firmly on fundamentals and resisting the urge to over-allocate, you can participate in transformational trends without letting them dominate your portfolio’s destiny.
The best play in an age of FOMO is not to avoid the rally - it’s to engage with it on your terms, with discipline. Let fundamentals be your compass and allocation your risk control; that way, when the tide turns, as it always does, you’ll still be afloat.
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