A | External market decline, A shares rise! The ChiNext Index tests the bottom and rebounds, rising by 0.3% in the morning. Where is the capital flowing to?

AI chip stocks fell, inflation data exceeded expectations, and the divergence between the US and Iran on restarting negotiations became more apparent, adding to the pressure on overnight US stocks and causing a collective pullback in the chip sector. Some analysts pointed out that there is a phenomenon of "exhaustion of buying interest" in the market, and investors are also concerned that the latest inflation data may have adverse effects on data center spending commitments. Influenced by external factors, A-shares staged a "tug of war" today, with the three major indexes showing resilience and turning higher. As of the midday close, the Shanghai Composite Index rose 0.09%, the Shenzhen Component Index rose 0.36%, and the ChiNext Index rose 0.30%. The turnover on the Shanghai and Shenzhen stock exchanges was 1.97 trillion yuan at midday, a decrease of 198.6 billion yuan from the previous trading day. On the market, the entire power industry chain surged, with power, power grid equipment, and collaborative computing leading the way, with multiple stocks such as Fujian Mindong Electric Power Group, DATANG POWER, and Liaoning Energy Industry hitting the limit up; the computing power leasing concept was active again, with Wuxi Online Offline Communication Information Technology Co., Ltd., ZJBC Information Technology hitting the limit up; computing power hardware stocks strengthened again, the optical module concept fluctuated and rebounded, with Anhui Anfu Battery Technology, Suzhou K-Hiragawa Electronic Technology, Xiamen Guang Pu Electronics hitting the limit up or rising more than 10%; glass substrates and PCB concepts continued to strengthen, with Caihong Display Devices, Han's Laser Technology Industry Group hitting the limit up; the fiber optic cable concept continued to be strong, with Shandong Xinneng Taishan Power Generation hitting the limit up; the cultivated diamond sector rose, with Henan Liliang Diamond, Henan Huanghe Whirlwind hitting the limit up or rising more than 10%; and the Hainan Free Trade Zone concept surged, with Hainan Haiqi Transportation Group hitting the limit up. In addition, the film and television media, non-ferrous metals, and commercial aerospace sectors all performed well during the day. In terms of declines, the innovative pharmaceutical concept fluctuated lower, with Hangzhou Tigermed Consulting falling nearly 10%; insurance and brokerage stocks fluctuated lower, with China Pacific Insurance and China Life Insurance falling more than 3%; real estate stocks fell into adjustment, with Metro Land Corporation falling more than 7%; pork and breeding concepts continued to weaken, with Zhejiang Huatong Meat Products falling more than 7%; lithium mining concepts fluctuated lower, with Guocheng Mining, Chengxin Lithium Group, Dazhong Mining, and YOUNGY Co.,Ltd. all falling. Looking ahead, China Securities Co., Ltd. stated that the current market's core logic is relatively clear, the market has not peaked, and it is transitioning from a unilateral rise to a phase of consolidation. The ample on-market liquidity has not shown any signs of significant tightening, and the fundamental logic of policy support and industrial upgrading remains stable, providing no basis for a deep adjustment in the market. Popular Sectors 1. The entire power industry chain surged The entire power industry chain surged, with power, power grid equipment, and collaborative computing leading the way, with Fujian Mindong Electric Power Group, DATANG POWER, and Liaoning Energy Industry hitting the limit up. Analysis: On the news front, four departments including the National Energy Administration jointly issued the "Action Plan for Promoting the Two-way Empowerment of Artificial Intelligence and Energy," which clearly states the need to "promote efficient collaboration among energy, computing power, scenarios, data, models, and other elements" to build a "deep integration of computing power and electricity development mechanism." 2. Active performance of computing power leasing concept The computing power leasing concept was active, with RunJian Co., Ltd. hitting the limit up for four consecutive days, and Shanghai CDXJ Digital Technology, Aurora Optoelectronics, and ZJBC Information Technology also hitting the limit up. Analysis: Since the beginning of the year, large-scale models have been continuously launched at home and abroad, and AI intelligent bodies have been rapidly popularized, driving the continuous warming of the computing power market. Experts believe that based on the current supply and demand situation, the computing power leasing market is expected to continue to grow in the foreseeable future. 3. Continued strength in the fiber optic concept The fiber optic cable concept continued its strength, with Shandong Xinneng Taishan Power Generation hitting the limit up, and Sichuan Huiyuan Optical Communications, Xiamen Voke Mold & Plastic Engineering, and Jiangsu Fasten following suit. Analysis: On the news front, Corning and NVIDIA announced a long-term partnership to strengthen the US AI infrastructure. Corning will build three new factories in the US to increase US optical connection capacity by 10 times and increase fiber production by over 50%. 4. Active development in the cultivated diamond sector The cultivated diamond sector rose, with Henan Liliang Diamond and Henan Huanghe Whirlwind hitting the limit up or rising more than 10%. Analysis: According to reports, Henan Huanghe Whirlwind Co., Ltd. has achieved a significant milestone in the independent research and development of its "diamond-silicon carbide composite material" project, with core performance indicators reaching international advanced levels, providing key support for China's independent and controllable high-end semiconductor heat dissipation technology. Institutional Views China Securities Co., Ltd.: The current market's core logic is relatively clear, and the market has not peaked The current market's core logic is relatively clear, and the market has not peaked, it is simply transitioning from a unilateral rise to a phase of consolidation. The ample on-market liquidity has not shown any signs of significant tightening, and the fundamental logic of policy support and industrial upgrading remains stable, providing no basis for a deep adjustment in the market. The current consolidation is more about cleaning up speculative funds and completing sector rotation in a healthy manner, with funds shifting from high-flying themes in the early stages to low-prices industries with performance support and reasonable valuations as a hedge for the future market momentum. On the operational level, it is not advisable to be overly pessimistic or panic, nor is it recommended to blindly chase high prices. It is advisable to maintain a moderately balanced position and patiently layout core themes on dips. Focus on tech growth sectors with industry logic while also allocating to stable sectors with undervalued repair. Avoid pure speculative plays and targets with overextended short-term gains, stay away from high-flying stocks without fundamental support. The market is likely to continue its consolidation phase in the future, focusing on structural opportunities, and grasping rotation rhythm and core tracks is the most prudent investment strategy at present. Morgan Stanley: Early signs of improvement in Chinese corporate earnings, raising target for Chinese stock indices Morgan Stanley believes that there are early signs of improvement in Chinese corporate earnings in the first quarter, with a significantly lower number of companies falling below market consensus compared to the previous quarter. Additionally, given the improvement in corporate earnings, the dominance of local companies in the global supply chain, and the strength of the Chinese yuan, Morgan Stanley has raised the target for Chinese stock indices. Analysts Laura Wang and others have raised the target for the Shanghai and Shenzhen 300 Index to 5,400 points in the second quarter of 2027, up from the previous target of 4,840 points set for December 2026; the new target is about 9% higher than the closing level on Tuesday. The target for the Hang Seng H-Share Index ETF has been raised from 9,700 points to 9,900 points, and the target for the MSCI China Index has been raised from 90 points to 91 points. CMSC: Clear trend of domestic storage expansion, increase in localization rate CMSC believes that the Philadelphia Semiconductor Index has been rising continuously since April, with global CSP total capital expenditure expected to be around $830 billion in 2026, driving the continued improvement in the AI industry chain's prosperity. The supply-demand gap in the storage industry will continue until 2027, and domestic module companies will enter a period of profit surge. The global CPU market space has significantly increased, with domestic computing power orders and revenue growing rapidly, thereby driving demand for advanced processes domestically. The clear trend of domestic storage expansion, the increase in localization rates, the continuous improvement in equipment orders, the breakthrough in production capacity bottlenecks, and the scale-up of materials. This article is reprinted from "Tencent Stocks", GMTEight editor: Wang Qiujia.