According to the CITIC Securities Research Report, unlike the 2022 high inflation and aggressive interest rate hike cycle, and the simultaneous decline in valuations and profits, although the Federal Reserve and the Bank of Japan raised interest rates in September, recent US economic activity, AI capital expenditure, and profits from leading technology companies have remained resilient. This round of global technology stock adjustments is mainly reflected in valuation contraction rather than profit decline. Future EPS and cash flow will still be the main line of market pricing. Although US long-term bond interest rates have repeatedly reached new highs with EPS support, US stock technology has also taken the lead in reaching new highs. CITIC Securities believes that the transmission of “CapEx → ROIC → EPS” in the computing power industry has been initially verified. The increase in capital expenditure from 2027 to 2028 will support the upward trend in the computing power chain and will provide solid support for the subsequent technology market. At the same time, the acceleration of RSI progress, the iteration of large versions of domestic models, and Meta Muse verifying the demand for C-side agents are driving the expansion of market focus from infrastructure investment to model capabilities, personal intelligence, and application monetization. Looking ahead to the fourth quarter, the conditions for starting the next round of technology markets are gradually being accumulated. October is a verification period for macro-data, three-quarter performance reports, new model iterations, and commercialization of new products. CITIC Securities remains cautiously optimistic. It is recommended to insist on structure over positions, and focus on structural opportunities such as Hong Kong stock model iteration, internet platforms, hardware technology upgrades, and domestic semiconductor equipment.

According to the CITIC Securities Research Report, unlike the 2022 high inflation and aggressive interest rate hike cycle, and the simultaneous decline in valuations and profits, although the Federal Reserve and the Bank of Japan raised interest rates in September, recent US economic activity, AI capital expenditure, and profits from leading technology companies have remained resilient. This round of global technology stock adjustments is mainly reflected in valuation contraction rather than profit decline. Future EPS and cash flow will still be the main line of market pricing. Although US long-term bond interest rates have repeatedly reached new highs with EPS support, US stock technology has also taken the lead in reaching new highs. CITIC Securities believes that the transmission of “CapEx → ROIC → EPS” in the computing power industry has been initially verified. The increase in capital expenditure from 2027 to 2028 will support the upward trend in the computing power chain and will provide solid support for the subsequent technology market. At the same time, the acceleration of RSI progress, the iteration of large versions of domestic models, and Meta Muse verifying the demand for C-side agents are driving the expansion of market focus from infrastructure investment to model capabilities, personal intelligence, and application monetization. Looking ahead to the fourth quarter, the conditions for starting the next round of technology markets are gradually being accumulated. October is a verification period for macro-data, three-quarter performance reports, new model iterations, and commercialization of new products. CITIC Securities remains cautiously optimistic. It is recommended to insist on structure over positions, and focus on structural opportunities such as Hong Kong stock model iteration, internet platforms, hardware technology upgrades, and domestic semiconductor equipment.