HK Stock Market Move | Concept stocks related to artificial intelligence all trended downward, intensifying market concerns about overvaluation of AI. Institutions are saying that Hong Kong's technology sector still remains attractive in the medium to long term.

AI concept stocks across the board fell, as of press time, KINGSOFT (03888) fell by 4.37% to 31.94 Hong Kong dollars; HUA HONG SEMI (01347) fell by 4.09% to 72.7 Hong Kong dollars; BABA-W (09988) fell by 2.58% to 155.1 Hong Kong dollars. On the news front, market concerns about the overvaluation of AI intensified, and there was a sell-off in US tech stocks overnight. According to reports, investor Michael Burry, famous for the movie "The Big Short", is heavily shorting NVIDIA and Palantir. The nominal value of the put options he holds on these two stocks exceeds 1 billion US dollars, accounting for 80% of his portfolio's weight in these companies. Prior to this, he had issued a cryptic warning to retail investors about market fervor. A recent research report from Soochow pointed out that overseas markets have been continuously worried about the AI bubble in the US stock market, combined with the mixed performance of leading US tech stocks in their financial reports. For example, Google's cloud computing and search business exceeded expectations, confirming the belief that AI tools are driving the market share of tech giants in the advertising business. However, compared to Meta, although revenue exceeded expectations, market concerns about future profit erosion due to significant Capex acceleration have led investors to remain cautious towards tech stocks in the Hong Kong market. The bank believes that although US tech giants will influence the trading pace of AI tech stocks in Hong Kong, the current position of tech stocks in Hong Kong is attractive in the medium to long term. Considering that the internal competition among tech giants is nearing its end, the bank believes that Hong Kong EPS will marginally rebound in the first quarter of next year.