On Friday (November 14), the computing power sector saw another major adjustment, with the ChiNext AI Index dropping over 3% in a single day, and most constituent stocks closing in the red. Among them, Xccelerate Data led the decline with a drop exceeding 7%, while stocks like Lightcore Tech, OFILM Data, Wangsu Tech, NewEra Optoelectronics, TFC Optical, and Longcore Innovation fell over 4%. Notably, NewEra Optoelectronics, a leader in the CPO (co-packaged optics) module segment, hit a new low in this correction cycle, retreating more than 24% from its peak on October 29.

In terms of popular ETFs, the ChiNext AI ETF (159363), which heavily invests in computing power sectors like optical modules, closed down 3.42%, falling below its 60-day moving average. Daily trading volume shrank to 430 million yuan, with net subscriptions of 44 million units amid the decline.

**Weekly Review: Tech Sentiment Cools** The ChiNext AI Index fell 6.23% for the week, reflecting heightened trading challenges. Key reasons include: 1. The AI computing power sector had rallied significantly in prior weeks, leading to profit-taking. 2. Post-Q3 earnings season, optimistic market expectations have largely been priced in, warranting technical adjustments and valuation digestion. 3. Some capital may be rotating to "high-to-low" strategies, seeking opportunities in emerging themes like the 15th Five-Year Plan or recent market catalysts.

**Short-Term Outlook: Volatility Ahead** Near-term risks include intensified volatility or accelerated corrections due to capital outflows. Long-term investors, however, should focus on industry trends, maintain patience, and avoid prematurely exiting core positions amid short-term fluctuations.

**1. Fundamentals: How Strong Are Earnings for Computing Power Stocks?** For instance, the ChiNext AI Index’s top holdings, largely optical module leaders, reported better-than-expected Q3 2025 results. Driven by AI-driven demand for 800G/1.6T optical modules, Zhongji Innolight posted revenue of 25.01 billion yuan (up 44.4% YoY) and net profit of 7.13 billion yuan (up 90% YoY). NewEra Optoelectronics reported revenue of 16.51 billion yuan (up 221.7% YoY) and net profit of 6.33 billion yuan (up 284.4% YoY).

*Disclaimer: Constituent stocks are for illustrative purposes only and do not constitute investment advice or reflect fund holdings.*

**2. Future Expectations: Global Cloud Capex Trends** Despite growing skepticism about an AI bubble in U.S. markets, the AI computing power investment wave has expanded globally, becoming a strategic priority. The industry remains in its early stages, with AI applications yet to scale and computing costs still high. Premature "bubble" calls may be unwarranted.

North America’s top four cloud providers (Microsoft, Amazon, Meta, Google) recently reported Q3 2025 capex surging 68% YoY to $96.4 billion. FactSet consensus expects full-year 2025 capex to reach $363.3 billion (up 63% YoY).

CITIC Securities notes that while the computing power sector is volatile, global investments in the space continue to rise. They recommend monitoring advancements in OCS, CPO, CPC, and hollow-core fiber technologies.

**3. Market Style: Will Computing Power’s Momentum Extend into 2026?** Historical analysis of seven similar market cycles shows year-end trends hinge on whether sector momentum persists into the next year. If high growth continues, the rally may broaden to undervalued supply chain segments; otherwise, capital may pivot to lagging sectors with recovery potential.

Industrial Securities highlights that tech and advanced manufacturing sectors continue to show growth potential. Projections indicate over 30% net profit growth in 2026 for AI hardware (communication devices, consumer electronics, semiconductors) and IT services, suggesting AI and computing power could remain market leaders.

**Investment Opportunity: Focus on Core Computing Power Plays** The ChiNext AI ETF (159363) and its feeder funds (Class A: 023407; Class C: 023408) offer targeted exposure to optical module leaders ("Yi-Zhong-Tian" trio), with over 54% weight in the segment. The ETF allocates ~70% to computing power and ~20% to AI applications, positioning it to capture AI thematic trends. (Data as of October 31, 2025.)

*Source: SSE/SZSE. Note: "First-of-its-kind" refers to the first ETF tracking the ChiNext AI Index.*

**Risk Disclosure**: The ChiNext AI ETF passively tracks its index (base date: December 28, 2018; launch date: July 11, 2024). Past performance (2020–2024: +20.1%, +17.57%, -34.52%, +47.83%, +38.44%) is not indicative of future results. Constituent stocks are subject to change per index rules. This material is not investment advice. The fund is rated R4 (high risk) and suitable for aggressive (C4+) investors. Investors must independently assess risks.

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