Today's A-share market experienced significant volatility, with the STAR Market and ChiNext Index both falling over 2% at one point before recovering in the afternoon. Let's discuss today's market highlights and conclude yesterday's topic—exploring the two fundamental drivers behind the global technology bull market.

Focusing on today, several headwinds impacted the market:

1. The primary headwind remains overseas macro conditions. The 30-year U.S. Treasury yield shows no signs of improvement, continuing its upward trend. It rose 10 basis points last Friday, 4 basis points yesterday, and surged another 5-6 basis points today, reaching new highs. Precious metals plunged again tonight, with silver falling 5% intraday and dropping 16% over the past four days.

2. The second headwind, mentioned last night, involves a recent high-performing new listing, which announced a trading suspension today for verification. This indicates speculative activity has exceeded acceptable limits. As shown in the chart below, new listings underperformed the broader market today, declining throughout the session. Trading suspensions for verification do carry a deterrent effect.

Naturally, not all investors are deterred. The chart below shows the intraday performance of three of the "big four" new listings that weren't suspended. Two opened 8-10% lower but climbed steadily throughout the day. The turnover rates for these three stocks and the new listing sector overall remain around 20%, indicating continued active trading.

3. The third point, more of a reminder than a headwind, involves insights shared today from recent strategy meetings of leading insurance asset managers regarding equity and bond investments. One major insurer mentioned two adjustments: first, lowering the dividend yield threshold for including "dividend assets" in their portfolios, a response to market appreciation; second, recent allocations have focused more on the OCI (Other Comprehensive Income) account rather than the TPL (Trading Portfolio) account.

As discussed previously, some insurers began reducing TPL positions—growth assets in trading accounts—starting in March, while adding to OCI positions, such as high-dividend sectors. The core issue was that excessive TPL exposure amplified the impact of stock market fluctuations on quarterly net profits. For instance, one insurer saw its year-on-year net profit turn negative in Q1, creating significant pressure for市值 management. Therefore, major insurers likely want to avoid negative year-on-year net profit comparisons in Q2. Following the recent rebound, insurers are expected to primarily redeem equity fund holdings (which fall under TPL trading assets) and continue using OCI accounts to add high-dividend stocks. Specific details on sectors and dividend yield criteria are available for members. The point here isn't to predict a style shift, as insurers using OCI accounts are indifferent to price fluctuations, focusing solely on dividend yield. The core reminder is that at current levels, long-term investors should maintain balanced allocations rather than extreme positions.

4. The fourth headwind, discussed in detail this morning, stems from remarks by Samsung's former chip division head at a forum yesterday. He expressed two views: First, due to aggressive capacity expansion by Chinese memory chip makers, memory chip prices could see a turning point as early as the second half of 2027. Second, if major tech companies' capital expenditures (Capex) continue increasing without sufficient returns, they may cut investments, potentially slowing data center construction and reducing memory chip demand.

The causality is debatable, but from a stock price perspective, following the forum, the memory chip sector began falling sharply last night in U.S. markets. The chart below shows the performance over the last trading day for a U.S. memory chip ETF (DRAM), leading memory stocks in Japan and South Korea, several A-share memory leaders (using their Hong Kong stock prices), and the three major optical module companies. Volatility was significant, with several stocks experiencing intraday declines exceeding 8%. Samsung Electronics rebounded somewhat intraday today due to positive developments in labor negotiations mentioned last night.

Additionally, another memory giant, Yangtze Memory, has begun IPO辅导. On this, my view may differ slightly: given the current state of the A-share market, IPOs of high-quality companies should be accelerated.

5. Another headwind concerns a specific sector. A leading commercial aerospace stock announced a major shareholder's plan to reduce its stake today, causing the stock to fall by the 10% daily limit. Management issued a response, as shown in the chart below.

Regarding commercial aerospace, as mentioned before, due to unclear commercialization paths, most companies in this sector, except for some equipment suppliers, are not profitable in the short term. This includes the aforementioned company, which reported a loss in Q1. Furthermore, no institutions forecast significant profit growth for at least the next two years.

．．．．．．． Above is the dividing line.

Incidentally, the Korean expert mentioned a view:

"If major tech companies' capital expenditures continue increasing without sufficient returns, they may cut investments, potentially slowing data center construction and reducing memory chip demand."

This aligns with the perspective shared in "Why Did Hang Seng Tech Plunge Today?"

This leads to a question: What are the fundamental drivers of the global technology bull market? In my view, they can be summarized in two points (though I'm not an expert, this is just one opinion).

First, import substitution, or more broadly, the restructuring of global supply chains. The situation domestically is clear, as seen in this afternoon's rebound driven by the independent and controllable sectors. In the U.S., I've previously cited Intel as an example. Supply chain restructuring本质上 involves redundant construction. From an efficiency standpoint, mutual procurement is optimal, but based on long-term uncertainties, countries are building their own systems. This redundant construction generates new demand.

Second, an unprecedented global wave of AI-related capital expenditure.

Let's elaborate in order.

1. The substantial revenue growth across all technology sectors, including memory, essentially stems from capital expenditure (Capex) by major Chinese and American companies (though the U.S. accounts for the larger share, akin to "scoring 82 points with Kobe"). Refer to the three charts below.

The first chart shows that following ChatGPT's emergence in 2022-23, capital expenditure by the four major cloud providers (Amazon, Google, Meta, Microsoft) began accelerating in 2024, expected to exceed a combined $700 billion this year.

The second chart, based on linear extrapolation, previously projected that AI-related capital expenditure would continue growing annually from the $700+ billion base, surpassing $1.6 trillion by 2031—more than double this year's level.

The third chart lists components required for AI infrastructure driven by this Capex, from left to right: memory, AI chips, CPUs, etc.

Consequently, many growth stocks in technology sectors are valued based on the assumption of continuously expanding capital expenditure, using linear extrapolation.

However, what if overseas interest rates remain "higher for longer," causing some major companies to be unable or unwilling to continue leveraging up and spending aggressively? Or if they decide to pause? Some sectors might then require recalculations.

2. Specifically regarding U.S. stocks, many observed outcomes are also driven by this unprecedented capital expenditure.

The next chart, based on the latest quarterly reports, shows impressive U.S. stock revenue growth, reaching a single-quarter high since 2022.

However, the subsequent chart reveals that among Q2 guidance provided post-earnings, sectors with a high proportion of positive surprises (green areas) are primarily technology and finance. In contrast, discretionary消费, staples, industrials, healthcare, and materials are dominated by negative expectations. This resembles the A-share market: "silicon-based" sectors rising while "carbon-based" sectors lag, resulting in U.S. markets also being driven by tech, with traditional sectors unable to keep pace.

3. Finally, let's add a value perspective.

As mentioned, the fundamental drivers of the global tech bull market are: 1) global supply chain restructuring, including technology; and 2) an unprecedented global wave of AI capital expenditure.

Digging deeper, what lies beneath?

Following this logic, the global tech bull market is essentially a "capital expenditure bull market," a "Capex bull market," a "big tech burning through reserves bull market," a "FOMO (Fear Of Missing Out) bull market for big tech." Major companies fear missing the AI era and losing access to new-era traffic portals. Therefore, before business models form closed loops (except perhaps Google), they spend heavily, believing in the power of massive investment.

From a national perspective, the tech bull market also reflects U.S. FOMO. American hegemony rests on military, financial, and technological foundations. Currently, there is an urgent need for a disruptive tool to maintain global leadership, and AI恰好 appears to be that logically coherent tool.

Meanwhile, it's建议 to继续 study the concept of the Thucydides Trap.

．．．．．． That's all for today.