Institutions: Conditions for Second Wave of Tech Rally May Be in Place, Favor AI Hardware and Mid-to-Downstream

With only three trading days remaining before the National Day holiday, this week's market performance has seen notable activity in the real estate, beauty and personal care, and social services sectors.

Institutional Views on Sector Allocation

In terms of sector allocation, institutions believe that the conditions for a second wave of gains in the technology sector may be gradually taking shape, with看好 opportunities in AI hardware and mid-to-downstream AI segments. They recommend using dividend-yielding assets as a core allocation, while also focusing on sectors benefiting from policy support, including power grids, energy storage, building materials, and engineering machinery.

Post-Holiday Investment Outlook

Looking ahead to the period after the holiday, factors that previously suppressed market trading activity have eased, and market expectations are expected to gradually recover. However, given the number of overseas disruptive factors, the market pattern is likely to remain one of structural, rotational recovery. Allocation should focus on three main themes:

1. Technology growth sectors: Semiconductors, communications, engineering machinery, and related segments
2. Dividend-yielding assets as core holdings: Focus on finance, utilities, and coal

The market has now entered a phase of sentiment repair, and the rebound is expected to continue. If positive developments emerge in AI or at the macroeconomic level, expectations for the rebound could be revised upward. In terms of allocation, AI hardware remains a key avenue for generating excess returns, with attention on domestic computing power and the semiconductor supply chain. Additionally, as the AI industry develops and large-model penetration rates continue to rise, opportunities in AI mid-to-downstream segments should not be overlooked.

Against the backdrop of improving global liquidity conditions and new catalysts from industry narratives, the technology sector has stabilized and rebounded since mid-September. Drawing on historical experience, the conditions for a second wave of gains in the technology sector may already be gradually in place. If oil prices continue to decline, expectations of Fed tightening ease, and overseas cloud vendors' AI revenue growth remains high, the rebound could be substantial. With multiple positive factors converging, a rebound in the technology sector is expected to drive an overall market upturn.

Fund Manager Perspectives

Huatai-PineBridge Fund: Market Expected to Return to Earnings-Driven Theme

In the medium term, listed companies' earnings data for 2026 is expected to continue improving. Domestic policy environment remains supportive, exports are maintaining high growth, and domestic demand data for consumption and investment is expected to show marginal improvement. Driven by proactive policies, the market is likely to return to an earnings-driven theme, with value styles such as dividends, consumption, and finance potentially experiencing a phase of balance.

Fullgoal Fund: Continuous Monitoring of External Disruptive Factors

Going forward, it remains necessary to continuously track changes in overseas interest rates, the sustainability of oil price declines, and external disruptions arising from the Fed's late-October meeting results. In terms of sector allocation, the AI technology sector should focus on areas with high order and earnings visibility, such as optical communications, PCB, electronic copper, and semiconductor equipment, as well as AI applications and non-ferrous metals with relatively low valuations.

China Universal Fund: Extreme Market Rotation Expected to Narrow

The recent extreme rotational market conditions are unlikely to be the norm and are expected to narrow as macroeconomic and industry expectations evolve. On one hand, macroeconomic uncertainty is declining, and several key observation points influencing Fed decisions are approaching, which may help bridge market divergences. On the other hand, the upcoming Anthropic listing and the new round of corporate earnings season are expected to provide clearer guidance for next year's industry outlook.

Key Events Influencing Post-Holiday Investment

People's Bank of China

The People's Bank of China stated on September 24 that it will continue to implement moderately accommodative monetary policy, increase counter-cyclical adjustment efforts, better leverage the aggregate and structural functions of monetary policy tools, strengthen coordination between monetary and fiscal policies, and promote stable economic growth and reasonable price recovery.

September PMI to Be Released

On September 30, China's September Manufacturing Purchasing Managers' Index (PMI) will be released. In August, the PMI stood at 49.8%, up 0.6 percentage points from the previous month, indicating a recovery in景气 levels.

U.S. August Price Index Due Next Week

On September 30 Beijing time, the PCE price index—considered the Fed's most preferred inflation indicator—will be released. This will serve as an important reference for the Fed's October interest rate decision. If the August PCE price index strengthens further, it could increase market bets on another Fed rate hike in October.

OpenAI to Hold Developer Conference

On September 29 local time, OpenAI will hold its 2026 Developer Conference. CEO Sam Altman is scheduled to deliver a keynote speech at 10:00 a.m. local time, with related content drawing significant attention.

(Source: China Securities Journal)