Market performance

Today, the broad market surged strongly, with the Shanghai Composite Index rising more than 1.5%. The AI-related sector performed strongly. The ChiNext Artificial Intelligence ETF (159388) and the Semiconductor Equipment ETF (159516) both rose more than 5% during the trading session. The Communication ETF (515880), the Software ETF (515230), and others rose more than 4% during the trading session.

How should we look at the AI outlook going forward?

1、Earnings support is relatively strong, with a high degree of realization along the value chain. The first choice is the Communication ETF (515880). In A-shares, links such as optical modules and servers have global advantages, and they occupy core market share within the industrial chains of North American tech giants. The optical module market size in 2026/2027 may maintain a doubling trajectory, and the leading companies’ earnings growth rate is expected to be higher than the industry.

2、The recent pullback has been significant. It is at a relatively low level with strong future expectations, so the first choice is the Semiconductor Equipment ETF (159516). Expanding GPU demand related to AI computing drives increased capacity for advanced process nodes. AI storage expansion drives increased storage capacity as well. Semiconductor equipment provides underlying support. Also, this year has catalysts such as the listing of two memory-related companies, giving both short-term and long-term narrative support. The recent pullback has been significant, and it may already be at the timing for positioning.

3、For the software sector, conservative investors still need to wait and see. Although large-model iterations are frequent and there are multiple catalysts for tokens to go overseas, after tensions ease in the Middle East the market’s risk appetite may improve. However, the sustainability of the Software ETF and the Computer ETF needs to be observed. Conservative investors chasing the price need to be cautious.

Could the conflict keep recurring?

Although Trump has been saying taco, the U.S. military is still continuing to deploy in the Middle East. In battle, the ones who fight poorly are those who come to the battlefield; in strategy, those who plan poorly are those who make moves. The risk of war is likely to peak in the very near term, but it could still recur. As investors, it is still necessary to protect principal, avoid chasing higher prices, and position in batches and at opportune times.

Risk warning: Mention of individual stocks is only for analysis of industry events and does not constitute any recommendation of or investment advice regarding any individual stock. Short-term index gains and losses are for reference only and do not represent its future performance, nor do they constitute any commitment or guarantee regarding fund performance. Viewpoints may be adjusted as market conditions change and do not constitute investment advice or commitments. The risk-return characteristics of the funds mentioned are all different. Investors are kindly requested to read the fund’s legal documents carefully, fully understand product elements, risk levels, and the principles of profit distribution, choose products that match their own risk tolerance, and invest cautiously.

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