CITIC Securities: Fundamentals support resilience of US stocks, short-term disturbances difficult to reverse upward trend.

According to a report by CITIC Securities, it is expected that the performance of US stocks will continue to show growth trends in the third quarter of 2025, with the information technology sector leading the way in profit growth once again. Although there is a divergence in profit performance between the technology and non-technology sectors, most industries are still maintaining relatively high profit growth rates. Looking at the entire year, profit expectations for US stocks have been structurally raised, with technology giants remaining the core driving force. The current market has doubts about the sustainability of cyclical investments in technology companies and is concerned about the bubble in the AI field of US stocks. However, it is expected that in the short term, it will be difficult to disprove their sustainability, and the extreme scenario of the bursting of the AI bubble is unlikely to occur in the short term due to the fact that the technology industry has not generally increased capital spending through debt issuance; on the contrary, cyclical investments are expected to continue to drive the AI narrative. In addition, the market is concerned about the spread of risks in US private credit, but currently it is still considered an isolated risk event. Although US large banks have relatively high risk exposure, they have a strong ability to absorb isolated risks. Therefore, it is believed that as long as private credit does not evolve into systemic risk, its impact on the overall US stock market is controllable. Overall, despite concerns about the sustainability of technology investments and credit risks, it is expected that the upward trend of US stocks under strong profit support will be difficult to change in the short term.