Morgan Stanley Fund: Expects market liquidity to be relatively friendly to the technology sector this year, optimistic about artificial intelligence, defense industry, and other sectors.

According to Morgan Stanley Fund, looking forward to 2025, they are relatively optimistic and still have confidence in the overall technology sector. Technology stocks require a high risk appetite in the market. Since September 2024, various policies have been rolled out, and it is currently difficult for the overall risk appetite level of A shares to return to previous lows. In 2025, mergers and acquisitions may boost the overall market's risk appetite. Similar to the TMT market in 2014-2015, once a company completes a merger or acquisition, its significant increase in value will drive up the valuation levels of the entire sector. Furthermore, in terms of liquidity, the latest monetary policy has stated that it will be moderately loose and is expected to be relatively friendly towards the overall technology sector in 2025. It is bullish on industries such as artificial intelligence, defense industry, wind power, and consumer electronics. From the perspective of the industry development cycle, the current technology industry has entered a very large innovation cycle, where artificial intelligence has strongly promoted innovation and iteration in both the B-side and C-side industries. It is expected that the industry will continue to be in an upward innovation cycle for the next few years. The valuation level of the technology sector is expected to be maintained, and if there are popular applications, the valuation may continue to rise. In the future, it will continue to select sectors with performance growth and companies with appropriate valuations in the entire technology field. In terms of segmentation, based on the comparison by Morgan Stanley Fund's technology research team, artificial intelligence is still expected to be the fastest growing segment in 2025 among all industries. There are many areas to look forward to in terms of computing power and related accessories, as well as AI application ends in 2025. From the observation of overseas technology giants and domestic internet giants, their demand for computing power has not weakened. From a valuation perspective, although artificial intelligence has risen for two years, the valuation level of AI computing power and industry core targets for 2025 is not high compared to the valuation level of the transition from 4G to 5G. Currently, the valuation of artificial intelligence has not shown signs of a bubble. Currently, computing power is still in the first half, and it is expected that the computing power industry will innovate in customization of computing, solving data center power issues, and bring investment opportunities in 2025. In 2025, especially in the United States, there will be many related applications, and as A-share listed companies in the AI application end have strong industrial chain capabilities, the explosion of these application ends will also drive up the valuation of related A-share sub-sectors.