On May 8, domestic chip stocks reversed course and declined. Cambricon Technologies Corporation Limited and Hygon Information Technology Co., Ltd. fell over 5%, while Hua Hong Semiconductor Limited and Semiconductor Manufacturing International Corporation dropped more than 4%. The HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190), which provides comprehensive exposure to the chip industry, opened lower and continued to decline, with its intraday price falling over 3% at one point before closing down 2.73%.

Over the three trading sessions following the holiday, the Sci-Tech Innovation Board chip sector largely maintained its pre-holiday upward trend. The Shanghai Stock Exchange Sci-Tech Innovation Board Chip Index, tracked by fund 589190, rose 4.99% cumulatively during this period. Taking a longer-term view, the Sci-Tech Innovation Board Chip Index has surged over 41% since April, outperforming the Wind All A Index by more than 29 percentage points.

Note: The annual performance of the Shanghai Stock Exchange Sci-Tech Innovation Board Chip Index for the past five full years is as follows: 2021: +6.87%, 2022: -33.69%, 2023: +7.26%, 2024: +34.52%, 2025: +61.33%. The index's constituent stocks are adjusted periodically according to its compilation rules, and its past performance does not guarantee future results.

Today's market reversal is attributed to two main factors. First, U.S. chip stocks retreated overnight, with the Philadelphia Semiconductor Index falling over 2.7%. Second, renewed tensions in the Middle East have dampened overall market risk appetite.

Returning to the sector's fundamentals, the industry's super-cycle remains intact, driven by catalysts such as the AI wave, industry-wide price increases, and domestic substitution. Institutional outlooks remain optimistic. Citic Securities Company Limited points out that domestic computing power has entered a virtuous cycle. With DeepSeek V4 achieving deep compatibility, domestic computing power chips are gradually reaching an inflection point from being "usable" to "user-friendly." The imminent shipment of the 950PR, along with strong Q1 earnings reports from companies like Cambricon Technologies Corporation Limited and Hygon, validates the sector's robust growth. Furthermore, the expansion of domestic memory production and advanced manufacturing processes continues to drive the increasing localization rate of semiconductor equipment.

Looking ahead to May and June, Citic Securities Company Limited believes that AI models are entering a new phase of weekly iteration cycles, with major model companies expected to release significant updates around mid-year, accelerating commercialization and reinforcing the virtuous cycle. The firm asserts that as long as the fundamental growth persists, the market rally will continue, recommending investors maintain their focus on the high-growth tech sector.

Regarding international developments, Anthropic's latest Annual Recurring Revenue (ARR) has exceeded $44 billion. Q1 earnings reports from major tech firms, exemplified by Google, show AI-related businesses continuing to accelerate. Four major companies—Microsoft, Google, Amazon, and Meta—have collectively raised their full-year capital expenditure guidance from approximately $665 billion to around $700 billion, further fueling the current super-inflation cycle in the computing power supply chain.

Huayuan Securities also noted that domestic AI large language models are entering a period of accelerated development, which is expected to drive growth in both the market size and penetration rate of domestic computing power. The firm remains bullish on the high-growth prospects of the domestic computing power sector, recommending attention to domestic chipmakers, CPU manufacturers, ODM providers, and IDC companies.

To capitalize on the chip industry's "super-cycle," high-beta growth stocks listed on China's ChiNext and STAR markets are preferred. Public information shows that the HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190) and its feeder funds (Class A: 021224, Class C: 021225) passively track the Shanghai Stock Exchange Sci-Tech Innovation Board Chip Index. While providing balanced, full-chain exposure to the chip industry, the fund maintains a weight of over 90% in core areas like integrated circuits and semiconductor equipment, representing high concentrations of hard technology and strong technical barriers.

Data source: Shanghai and Shenzhen Stock Exchanges, etc. Institutional viewpoints sourced from: Citic Securities Company Limited report dated May 8, 2026, "CITIC SEC: Nasdaq Hits Record High, Is May's Tech Rally a Rebound or a Reversal?"; Huayuan Securities report dated May 5, 2026, "Domestic Computing Power Enters Earnings Realization Phase."

ETF fee-related information: When subscribing for or redeeming fund shares, subscription/redemption agents may charge a commission not exceeding 0.5%, which includes related fees charged by stock exchanges and registration institutions. Feeder fund fee-related information: For HUABAO SSE Sci-Tech Innovation Board Chip ETF Feeder Fund A, the front-end subscription fee is CNY 1,000 per transaction for subscription amounts of CNY 2 million or more, 0.2% for amounts between CNY 1 million (inclusive) and CNY 2 million, and 0.5% for amounts below CNY 1 million. The redemption fee is 1.5% for holding periods under 7 days and 0% for holding periods of 7 days or more. HUABAO SSE Sci-Tech Innovation Board Chip ETF Feeder Fund C does not charge a subscription fee. Its redemption fee is 1.5% for holding periods under 7 days and 0% for holding periods of 7 days or more, with a sales service fee of 0.2%.

Risk Disclosure: The HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND passively tracks the Shanghai Stock Exchange Sci-Tech Innovation Board Chip Index. The index base date is December 31, 2019, and its release date was June 13, 2022. This product is issued and managed by HUABAO Fund Management Co., Ltd. Selling agencies do not assume responsibility for the product's investment performance, redemption, or risk management. Investors should carefully read the Fund Contract, Prospectus, Fund Product Key Facts Statement, and other legal fund documents to understand the fund's risk-return profile and select a product suitable for their own risk tolerance. The fund manager assesses this fund's risk rating as R4 (Medium-High Risk), suitable for investors with a suitability rating of C4 or higher. The performance of other funds managed by the fund manager does not guarantee this fund's future performance. Past fund performance does not indicate future results. Funds carry risks, and investment requires caution. Selling agencies (including the fund manager's direct sales channels and other selling agencies) evaluate this fund's risk according to relevant laws and regulations. Investors should pay attention to the suitability opinions provided by the fund manager in a timely manner. Suitability opinions from different selling agencies may not be consistent, and the risk rating results issued by fund selling agencies for this fund product shall not be lower than the risk rating result determined by the fund manager. The description of the fund's risk-return characteristics in the fund contract and its risk rating may differ due to different consideration factors. Investors should understand the fund's risk-return situation and, based on their own investment objectives, horizon, experience, and risk tolerance, prudently select fund products and bear the risks themselves. The China Securities Regulatory Commission's registration of this fund does not indicate a substantive judgment or guarantee of its investment value, market prospects, or returns. Funds carry risks, and investment requires caution.

MACD golden cross signals have formed, and these stocks are performing well.