CITIC Securities: AI industry trends once again become core variables affecting the performance of US technology stocks in the second half of the year. Focus on Hyperscalers, application software & internet companies.

The research report from CITIC Securities indicates that with the decline of macro tail risks, the trend of the AI industry has once again become a core variable affecting the performance of US technology stocks in the second half of the year. Looking ahead to the second half of the year, our judgments on various technology sub-sectors are as follows: 1) Hardware & Semiconductor, expected to continue to experience high volatility, with market trading breadth continuing to narrow and focus on the most bargaining power & price elasticity segments of the industry chain, as well as areas where technological innovation brings significant incremental growth; 2) Hyperscaler vendors, with macro expectations improving, market expectations for their traditional internet and software businesses are expected to significantly improve. Some views on the capital expenditure dilemma of Hyperscaler vendors are clearly exaggerated, referring to historical experience with META, the best way to break the deadlock may be Wall Street's attitude, board pressure or the market should not underestimate their ability to actively adjust their capital expenditure rhythms; 3) Software & Internet, with the gradual disillusionment of the market towards AI models, the pessimistic pricing of software & internet companies is gradually improving, but a bottoming out rebound in revenue growth is still a necessary condition for stock price rebound, with macro expectations improving and more than a year of business adjustments & optimizations increasing this possibility.