Singapore Stocks: AI Infrastructure Boom - Maxthon

Case Study, Outlook & Solutions (2026)

EXECUTIVE SUMMARY

While US investors chase Nvidia and Broadcom directly, Singapore investors face a different reality: no pure-play AI chipmakers listed on SGX. However, Singapore’s strategic position as Asia’s data centre hub and semiconductor manufacturing ecosystem presents unique opportunities to capitalize on the global AI boom through infrastructure plays, banking wealth management, and REIT exposure.

Key Finding: The STI posted 20.7% price returns (26.7% total returns including dividends) in 2025, outperforming many global markets, driven by banks hitting record highs and REITs rebounding 9% on falling interest rates.

AI Chip Stocks in Singapore Context

Based on the global predictions and Singapore’s unique market structure, here’s how the AI chip boom translates for local investors:

Singapore’s Position: Infrastructure Play, Not Pure-Play Chipmaker

Unlike the US market where you can directly buy Nvidia or Broadcom, Singapore’s AI exposure is less about pure-play model developers and more about companies that power, house, test, secure, and distribute AI compute: data centre REITs, telecom and cloud infrastructure, and semiconductor equipment and precision engineering names A*STAR.

Key Singapore Investment Opportunities

1. Data Centre REITs (Primary Beneficiaries)

Singapore has four major data centre REITs positioned to benefit:

Keppel DC REIT: Recently acquired two AI-ready hyperscale data centres for S$1.38 billion in one of the largest data centre transactions in Southeast Asia IDC. With S$5 billion in assets under management and 97.2% occupancy, it’s the flagship play.
Mapletree Industrial Trust (MIT): About 56% of its portfolio comprises data centres across the US, Japan, and Singapore.
Digital Core REIT: Owns 10 data centres with US$1.4 billion AUM and strong sponsor backing from Digital Realty Trust.
CapitaLand Integrated Commercial Trust (CICT): Expanding data centre exposure as part of its portfolio mix.

2. Semiconductor Ecosystem Players

While Singapore doesn’t have listed pure-play chip designers, it has critical supply chain players:

AEM Holdings: Provides chip testing solutions, directly benefiting from AI GPU and DRAM memory ramp-ups
Frencken Group: Supplies advanced lithography equipment
Venture Corporation: Electronics manufacturer benefiting from high-end electronics demand

Singapore commands 10% of global chip output and about 20% of semiconductor equipment, with an estimated 82% share of Southeast Asia’s semiconductor market TheStreet.

3. Infrastructure Enablers

Sembcorp Industries: Provides 33% of energy to Singapore’s data centres OpenGov Asia, counting Singtel and Equinix as clients
CSE Global: Shifting revenue mix toward major US data centre projects
Singtel: Expanding data centre capacity with plans to operationalize over 200 MW by end-2026

Singapore Government Support

The government is heavily backing this sector:

S$37 billion RIE2030 budget with significant focus on semiconductors and AI Nasdaq
S$1 billion earmarked for semiconductor infrastructure, including the S$500 million National Semiconductor Translation and Innovation Centre TheStreet
Tax incentives allowing up to 400% deductions on R&D projects through 2028

Market Outlook for 2026

Positive Drivers:

Singapore semiconductor market expected to grow from USD 10.16 billion in 2025 to USD 14.15 billion by 2030 at 6.9% CAGR TheStreet
AI-centric workloads posting an 11.03% CAGR through 2030 TheStreet
JPMorgan views ASEAN equities at an inflection point in 2026, with recovering earnings/valuations after years of underperformance A*STAR

Key Risks:

Rising utility costs and tight engineering talent pool could trim margins and slow fab ramp-ups TheStreet
Power, water, and land constraints in Singapore limit data centre expansion
Geopolitical uncertainties affecting semiconductor supply chains

Investment Strategy for Singapore Investors

Given Singapore’s market structure, the best approach is:

Diversified Exposure: Rather than betting on single chipmakers, spread across data centre REITs, semiconductor equipment suppliers, and infrastructure plays
Quality Over Growth: Focus on established players with strong occupancy rates, long lease terms (WALE), and low gearing ratios
Yield + Growth: Many Singapore AI plays offer both dividend yield (REITs averaging ~5%) and capital appreciation potential
Monitor Rate Sensitivity: Data centre REITs are sensitive to interest rates – the Fed’s 2026 rate path will significantly impact valuations

DBS Research set an STI end-2026 target of 4,880, expecting moderate gains with risks including tariffs and the tech cycle AI Business, particularly affecting electronics and tech supply chains.

Bottom Line: Singapore investors can’t buy Nvidia directly on SGX, but they can gain exposure to the AI infrastructure boom through REITs, semiconductor equipment makers, and power/connectivity providers that benefit from the same global trends driving US chip stocks higher.

CASE STUDY: THE SINGAPORE PARADOX

The Challenge

Singapore’s market structure creates a paradox for investors wanting AI exposure:

What Singapore DOESN’T Have:

No listed pure-play AI chip designers (no Nvidia equivalent)
No major fabless semiconductor companies on SGX
Limited direct exposure to AI software development

What Singapore DOES Have:

10% of global chip output, 20% of semiconductor equipment
82% of Southeast Asia’s semiconductor market
Asia’s largest data centre hub outside China
Three systematically important banks managing regional AI wealth

The Numbers Behind 2025’s Rally

Market Performance (as of Dec 18, 2025):

STI: 4,570 points (+20.7% price, +26.7% total return)
S-REITs: +9% price return (+14.4% total return, strongest since 2019)
Banking sector: DBS and OCBC hit all-time highs in December

Rate Environment Shift:

Singapore 3-month SORA: dropped to ~1.24% (from ~3.5% peak)
10-year SGS yield: stabilized around 1.9%
This created a powerful tailwind for dividend-yielding equities

OUTLOOK: THREE DRIVERS FOR 2026

Driver 1: Banking Sector – The Wealth Management Angle

The AI Connection Most Miss: Singapore banks aren’t selling AI chips, but they’re managing the wealth created by the AI boom across Asia.

2026 Bank Forecasts:

Bank	FY26E Div Yield	Target Price	Key Strength	Risk
DBS	6.1%	$70 (JPM)	Digital leadership, 17% ROE	Rich valuation at 2.1x P/B
OCBC	5.4%	$20 (Phillip)	Wealth AUM +18% YoY, excess capital	China exposure concerns
UOB	6.6%	Fair value	Highest yield, ASEAN focus	S$615M pre-emptive provisions Q3

Why This Matters for AI Investors:

Wealth management fee income growing 10-20% YoY (driven partly by tech wealth)
Investment-to-AUM ratios at 40-56% (clients investing in global AI stocks)
Banks financing data centre buildouts across ASEAN
MAS deploying S$5B equity market development funds through banks

2026 Headwinds:

Net Interest Margin (NIM) compression: DBS at 1.96%, OCBC at 1.84%, UOB at 1.82%
Expected loan growth: low single digits
Credit costs: UOB guiding 25-30bps (elevated)

Driver 2: Data Centre REITs – The Infrastructure Play

The Thesis: Every AI model needs compute. Every GPU cluster needs physical space, power, and cooling. Singapore data centre REITs own and lease these critical assets to hyperscalers.

Top Data Centre REIT Picks (OCBC Research):

Keppel DC REIT (AJBU)

S$5.9B AUM, 69.5% hyperscaler exposure
Recent S$50.5M acquisition for 100% ownership of two SG data centres
0.8% DPU accretive
S$1.38B acquisition of AI-ready hyperscale centres (largest in SEA)
Yield: ~6-7%

Digital Core REIT (DCRU)

US$1.4B AUM, 11 freehold data centres globally
50% US-based (directly benefits from US AI spending surge)
Yield: 7.6%
Unloved but positioned for rate-cut recovery

Mapletree Industrial Trust (ME8U)

56% data centre exposure (US, Japan, Singapore)
Diversified across industrial/logistics
Yield: ~5.5%

2026 REIT Outlook (OCBC Investment Research):

Theme 1: DPU growth inflection (divergent outcomes)
Theme 2: Accelerated capital recycling
Theme 3: Defensive positioning – favor retail, logistics, data centres
Sector valuation: 0.95x P/B (below historical average)
Average distribution yield: ~5%

Key Risks:

Interest rate sensitivity remains (though declining)
Power constraints in Singapore limiting new supply
Refinancing risks for high-leverage REITs
Industrial property oversupply: 2.3M sqm completing 2025-26 vs 0.9M annual average

Driver 3: Semiconductor Ecosystem – The Supply Chain Play

Companies With Direct AI Exposure:

AEM Holdings

Chip testing solutions for AI GPUs and memory
Benefits from every Nvidia H100/B200 shipment
Direct exposure to semiconductor equipment demand

Sembcorp Industries (U96)

The Power Angle: Provides 33% of Singapore’s data centre energy
Clients: Singtel, Equinix
As AI compute grows, so does power demand

ST Engineering (STE)

S$250M/5-year AI investment
Physical AI and robotics program
28x forward PE, 2.1% yield
Market cap: S$24.8B

Venture Corporation (V03)

Electronics manufacturing benefiting from high-end electronics demand
Exposure to data centre hardware supply chains

Singapore Semiconductor Market:

Expected growth: US$10.16B (2025) → US$14.15B (2030)
CAGR: 6.9%
AI-centric workloads: 11.03% CAGR through 2030

SOLUTIONS: PORTFOLIO STRATEGIES

Strategy 1: The Dividend Harvester

For: Conservative income investors

Allocation:

40% Banking (split: 50% DBS, 25% OCBC, 25% UOB)
40% Data Centre REITs (Keppel DC, Digital Core)
20% Retail/Industrial REITs (Frasers Centrepoint, AIMS APAC)

Expected Portfolio Yield: 5.5-6%

Why It Works:

Banks provide growth + 5-6% dividends
REITs add 6-8% income
Diversification across rate sensitivity levels
Quarterly income from staggered dividend schedules

Strategy 2: The AI Infrastructure Thematic

For: Growth-oriented investors

Allocation:

30% Data Centre REITs
25% Banking (overweight DBS for wealth management leverage)
20% Semiconductor equipment (AEM, Frencken)
15% Sembcorp (power infrastructure)
10% ST Engineering (AI technology)

Target Return: 12-15% total return

Rationale:

Direct play on AI compute infrastructure buildout
Captures both income and capital appreciation
Leverages Singapore’s unique positioning

Strategy 3: The Passive Indexer

For: Hands-off investors

Implementation:

70% STI ETF (SPDR or Nikko AM)
30% S-REIT ETF

Why It Works:

Banks comprise ~40% of STI (instant financial exposure)
Automatic rebalancing
Low fees (0.3% expense ratio)
Captures market beta with 4-5% yield

EXTENDED SOLUTIONS: TACTICAL CONSIDERATIONS

Timing Entry Points

Q1 2026 Watch List:

Bank earnings (Feb): Watch for NIM guidance, loan growth, wealth fee momentum
Fed policy signals: 2-3 more cuts expected, but watch inflation data
China stimulus: Impacts OCBC earnings and sentiment
MAS policy decision (April): Currently expected steady, but watch GDP growth

Buy Signals:

STI pullback to 4,300-4,400 range
S-REIT index yield pushing toward 6%+
Bank P/B ratios: DBS <1.9x, OCBC <1.3x

Red Flags:

Fed pivot to hawkish stance (inflation resurgence)
China property crisis deepening (UOB/OCBC credit risks)
US recession (tech spending cuts → data centre demand drop)

Risk Management

Position Sizing:

No single stock >10% of portfolio
Keep 15-20% cash for opportunities
Diversify across sub-sectors within AI theme

Hedging Options:

Consider overweighting Singapore-focused REITs vs regional exposure
Balance offshore earnings (banks’ regional income) with domestic stability
Use DBS as core holding (highest quality) with OCBC/UOB as value plays

Tax Optimization

Singapore Advantages:

No capital gains tax
No dividend withholding tax for Singapore stocks
REIT distributions tax-advantaged
Consider CPF investment schemes for additional tax benefits

IMPACT ANALYSIS: 2026 SCENARIOS

Base Case (60% probability): Steady Growth

Assumptions:

Fed cuts 2-3 times to 3.75-4% by year-end
Singapore GDP: 2.3% (economist consensus)
China: stabilizes with modest stimulus
No major geopolitical shocks

Outcomes:

STI Target: 4,880 (DBS estimate) = +6.8% upside
Banking EPS growth: +5-8%
REIT DPU growth: +2-4% (driven by refinancing savings)
Portfolio Return: 10-12% total return

Sector Performance Ranking:

Banks (steady dividends, wealth momentum)
Data Centre REITs (beneficiary of rate cuts)
Retail REITs (tourism recovery)
Industrial REITs (supply overhang pressure)

Bull Case (25% probability): AI Supercycle

Triggers:

Tech spending exceeds $150B+ (from current ~$110B/quarter)
Breakthrough AI applications drive enterprise adoption
Singapore wins major data centre projects
MAS additional stimulus measures

Outcomes:

STI Target: 5,200+ = +14% upside
Data Centre REIT outperformance: +20-25%
AEM Holdings, Sembcorp rally 30%+
Banks see wealth fee explosion: +15-20% growth

Portfolio Return: 18-22% total return

Bear Case (15% probability): AI Bubble Burst

Triggers:

US recession confirmed
AI ROI disappointment → capex cuts
China hard landing
Geopolitical crisis (Taiwan strait tensions)

Outcomes:

STI Target: 4,100-4,200 = -10% downside
Data Centre REITs hit hardest: -15-20%
Banks face credit cycle turn: UOB provisions spike
Flight to quality: Retail REITs, utilities outperform

Defense:

Overweight DBS (most defensive bank)
Favor Singapore-focused REITs over offshore
Hold Singapore government bonds
Expected portfolio drawdown: -8 to -12%

ACTIONABLE IMPLEMENTATION CHECKLIST

Immediate Actions (This Week)

Open brokerage account if needed (FSMOne, Moomoo, Tiger, IBKR)
Review current portfolio allocation
Calculate target position sizes
Set up price alerts: STI at 4,400, DBS at $52, Keppel DC at $1.80

Month 1-2 (Building Positions)

Start dollar-cost averaging into core positions
Accumulate on dips: DBS ($52-54), OCBC ($17.50-18.50)
Initiate REIT positions: Keppel DC ($1.85-1.95), Digital Core ($0.50-0.55)
Monitor Q4 2025 bank earnings (Feb announcements)

Month 3-4 (Refinement)

Rebalance based on Q1 performance
Add tactical positions if opportunities arise
Review Fed policy trajectory (March/June FOMC)
Assess dividend reinvestment strategy

Quarterly Reviews

Check STI vs target progress
Monitor bank NIM trends
Review REIT DPU announcements
Adjust allocations based on scenario probabilities

CONCLUSION: THE SINGAPORE ADVANTAGE

Why Singapore Stocks Matter for AI Investors:

You can’t buy Nvidia on SGX. But you CAN own:

The banks managing Asia’s AI wealth
The real estate housing AI data centres
The equipment makers supplying chip production
The utilities powering the compute

The 2026 Opportunity:

Valuations reasonable: STI at 13.4x forward PE
Dividend yields compelling: 4-7% across sectors
Policy support: S$5B MAS equity program, $30M value unlock initiative
Regional positioning: Singapore as safe-haven amid global uncertainty

Risk-Reward Assessment:

Downside protection: 4-5% dividend yield cushions
Upside potential: 10-15% total returns in base case
Asymmetry: More upside than downside vs global tech multiples

Final Verdict: Singapore stocks aren’t a direct AI play—they’re an infrastructure arbitrage on the AI revolution. While US tech stocks price in perfection, Singapore equities offer reasonable valuations, superior yields, and positional advantage in Asia’s AI buildout.

The question isn’t whether AI will transform the world. It’s whether you want to pay 35x earnings for Nvidia, or 13x for the banks financing Asia’s AI adoption and REITs housing the compute infrastructure.

For Singapore investors, the path to AI exposure runs through dividends, data centres, and DBS.

Disclaimer: This analysis is for educational purposes only. Not financial advice. Always conduct your own due diligence and consult licensed advisors. Past performance does not guarantee future results. All data accurate as of December 22, 2025.