HK Stock Market Move | AI hardware stocks broadly decline as concerns over capital expenditure returns and financing sustainability intensify; industry valuation and earnings alignment faces reassessment.

PCB, optical communications, and other AI hardware stocks fell collectively. As of press time, Shenzhen Kinwong Electronic (03228) dropped 11.29% to HK$56.95; YOFC (06869) fell 9.45% to HK$101.6; GigaDevice Semiconductor Inc. (03986) declined 6.50% to HK$325.2; Zhongji Innolight (03308) fell 4.04% to HK$724. On the news front, recent market concerns over AI companies' investment returns and financing sustainability have led to a significant correction in AI hardware stocks. The current earnings season has entered a performance verification period, and the alignment between valuations and earnings is facing reassessment. Notably, Musk's latest prediction is that in recent weeks, debt markets have almost completely cut off funding channels, and any company without independent large-scale revenue outside of AI data centers can hardly obtain financing. This means more than 200 new cloud service providers will face "big fish eat small fish"-style death and consolidation. Morgan Stanley data shows that in September, the average weekly trading volume of CDS linked to bonds of Oracle, SpaceX, Alphabet, Amazon, Meta, Broadcom, and Nvidia exceeded US$9 billion, while in July this figure was still less than US$2 billion. Nomura believes that the AI investment narrative is facing an internal contradiction in its own logic. The market's judgment on the capex path of hyperscale cloud computing providers has evolved from the previous "positive no matter what, win either way" to the current "choose the lesser of two evils" dilemma.