Goldman Sachs comments on four major Japanese industrial electronics stocks: Who is the biggest winner in AI data centers? | Blue Blood Factory
Goldman Sachs commented on four major Japanese industrial electronics stocks, pointing out that Mitsubishi Electric and Panasonic have performed outstandingly in the wave of investment in AI data centers. Mitsubishi Electric is expected to benefit from domestic defense and data center collaborations due to its military background and the customization of AI power supply equipment. Panasonic, on the other hand, has a high market share in the battery backup system market, and sales are expected to grow significantly. Overall, the potential of Japan's traditional industries in the AI field is gradually becoming apparent
How strong is the Japanese stock market? Earlier, in my column on January 25 titled "Japanese Toilets Also Embrace AI Concept: TOTO's Technology Becomes Key Component in Semiconductor Parts," I mentioned that in this era of AI frenzy sweeping the globe, don't think that only the tech nouveau riche in Silicon Valley wearing T-shirts are the winners. Take a look at Japan's TOTO; while the average person knows it produces high-end smart toilets that can wash your backside like a spring breeze, few realize that this century-old company harbors hidden dangers, as its top-notch precision ceramic technology is actually an indispensable key component in semiconductor manufacturing equipment. Now, less than a month later, the market has awakened from its slumber, with the stock price quietly climbing from 5,142 yen in late January to the current level of 6,195 yen, accumulating a staggering increase of nearly 28% in just one month. This kind of explosive momentum is a testament to the depth of Japanese industry.
Related article: Japanese Toilets Also Embrace AI Concept: TOTO's Technology Becomes Key Component in Semiconductor Parts
This undercurrent of traditional Japanese industry supporting half of the AI landscape has finally surfaced. Recently, the governments of the U.S. and Japan approved an investment plan of about $33 billion for AI data centers, and Wall Street's go-to shark Goldman Sachs immediately released a heavyweight report commenting on four Japanese industrial electronics giants. This AI arms race in the great power game is essentially a "blue-blood" land-grabbing movement in 21st-century high technology, and Japan's century-old companies are precisely grasping the lifeblood of this movement.
Mitsubishi Electric Inherits Japanese Military Industrial Bloodline
In Goldman Sachs' report, both Mitsubishi Electric and Panasonic were crowned with accolades. First, Mitsubishi Electric, which now stands at the forefront of both "defense" and "AI" concepts, is like a player who has activated cheat codes in a game. Mitsubishi has inherited the fine bloodline of Japan's military industry, and domestic defense profits are booming. If weapon export restrictions are relaxed in the future, profits are bound to erupt like a volcano. On the AI battlefield, it has also tailored specialized power supply equipment for North America and signed a memorandum of understanding with Taiwan's Foxconn to collaborate on data centers. Coupled with its internal corporate restructuring, akin to a samurai's rebirth after seppuku, cost-cutting has shown immediate results, making Goldman Sachs' optimistic outlook entirely reasonable.
Panasonic Already Has Battery Plant Layouts in the U.S.
On the other hand, Panasonic has a very high market share in AI data center battery backup systems, with sales of such products expected to explode at an annual growth rate of 1.8 times by 2026. Even more impressive, Panasonic has already established battery plants in the U.S., allowing it to pivot to data center applications at any time. This strategic depth is reminiscent of American munitions factories during World War II, winning the race before it even began, and the risks associated with electric vehicles are naturally overshadowed by favorable factors.
Hitachi Handles Many Critical Systems
As for the former king Hitachi, the market is currently worried that the AI tide will ruthlessly overturn the traditional software service industry, leading to a shrinkage in its valuation. However, there is no need to be overly pessimistic; analysts emphasize that Hitachi handles many large and critical systems that are "error-free." This physical AI business, built on a strong hardware foundation, cannot be easily replaced by a few garage startups in Silicon Valley, and even if it experiences extreme ups and downs, it has its own protective moat
Fujikura Focuses on Ultra-High-Density Fiber Optic Cables
The final highlight is Fujikura, a fiber optic stock that stands out in the list of U.S.-Japan investments. Its ultra-high-density fiber optic cables are essential to major telecommunications giants. In today's AI computing power-hungry environment, Fujikura's only challenge is how to meet the enormous demand, which tests its delivery capabilities.
At the same time, industry competitors are also gearing up. Sumitomo Electric has partnered with NVIDIA to develop next-generation technologies, while Furukawa Electric is aggressively building new factories to catch up.
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