Recent market activity has shown signs of a pullback in the previously strong technology and growth sectors. With sector positioning at elevated levels, there may be a short-term need for market style rebalancing. Concurrently, the overarching trend in the AI computing power industry persists, and generally optimistic earnings reports from U.S. stocks have buoyed sentiment for overseas tech. However, the A-share market is still awaiting new catalysts from corporate results.
Evaluating the Tech Rally's Longevity
As market volatility increases, questions arise about the sustainability of the technology rally and how to identify more cost-effective investment opportunities. Insights from Zhao Fengfei, a "Technology+" fund manager at Great Wall Fund, provide some perspective.
Synergistic AI Acceleration and Industry Impact
Zhao Fengfei indicated that the AI sector is currently experiencing synergistic acceleration between China and the U.S., with a significant pull effect on the industrial chain. AI-related hardware is entering a phase where revenue and profits are being realized. Technology segments represented by computing power and semiconductors are relatively sustainable hotspots. The IPO of a domestic memory technology company has also provided equipment firms with a dual narrative of capacity expansion and increasing localization rates.
Key Technology Investment Themes
Within the technology sphere, Zhao Fengfei believes several areas warrant attention currently. The first is AI infrastructure, encompassing computing power, storage power, and power supply, with a personal focus on the domestic computing power segment. The second is semiconductors, including equipment, materials, and certain design areas, which are supported by both localization trends and the logic of high capacity utilization and price increases. The third category includes other emerging industries such as commercial aerospace, robotics, intelligent driving, and quantum computing. These align with industrial development trends, but their earnings realization still requires time, resulting in relatively lower certainty, meriting moderate attention.
Additional Areas for Investor Consideration
Furthermore, Zhao Fengfei suggested keeping an eye on end-device AI. The entry of a major overseas semiconductor company into the AI PC market has generated further anticipation. Additionally, recent better-than-expected earnings from U.S. software stocks have highlighted potential rebound opportunities, possibly stemming from a temporary easing or reversal of concerns about models' impact on software demand.