The technology market, particularly in the AI sector, has experienced volatile swings since July. A recent focal point has been a major South Korean semiconductor firm revising down its performance forecasts, which triggered turbulence in overseas tech stocks. Coupled with a renewed tightening of geopolitical tensions in the Middle East, this has also impacted sentiment towards A-share technology stocks.

Following significant adjustments, market divergence over the sustainability of the AI theme has intensified. Capital is rotating and waiting on the sidelines for clearer signals of an uptrend. Has the AI rally fundamentally shifted? Has the market's narrative logic changed? Here are the latest insights from the portfolio managers of the Great Wall Fund "Tech+" strategy.

Manager Perspectives on Key Sectors

Chen Liangdong: Focus on High-Demand AI Sectors. Analyzing from both demand and supply perspectives, two primary directions are favored: 1) Sectors experiencing rapid demand growth, primarily those driven by artificial intelligence; 2) Industries with improving supply-demand dynamics that are reaching an inflection point in their cycle, offering favorable risk-reward investment opportunities, especially as real estate's impact on the macroeconomy diminishes and under the guidance of national policies aimed at curbing excessive internal competition.

Chu Wenyu: Emphasize Fundamentals and Earnings Realization. The third quarter market is expected to enter a phase of consolidation and correction. With valuations in the tech sector generally elevated, the market will place higher demands on fundamental quality and the degree of earnings delivery. Non-AI thematic sectors (such as commercial aerospace, robotics, innovative drugs, etc.) may see periodic performance opportunities. Simultaneously, greater attention should be paid to shifts in the overseas AI narrative and liquidity conditions in Q3.

In terms of specific directions, focus should be on areas with strong earnings realization, clear logic for price or capacity increases, and those not yet fully priced in by the AI narrative. These include domestic computing power, wafer manufacturing, semiconductor materials and components, and chip design.

You Guoliang: Watch for Recovery Opportunities in Oversold Sectors. While expectations for Federal Reserve rate hikes strengthened in Q2, considering factors like the US mid-term elections in the second half of the year, the Fed may not adopt an overly hawkish stance. This presents opportunities for recovery in sectors previously oversold due to liquidity concerns. Furthermore, the AI industry trend is having an increasingly significant impact on the macro landscape and should be incorporated into macro judgment frameworks going forward.

Specifically, commercial aerospace has seen increasing catalysts since July and may be poised for a rebound. If the broader AI sector experiences a sufficiently deep correction, opportunities are still expected. Looking further ahead, defense and commercial aviation/engines are also anticipated to perform well.

Zhao Fengfei: AI Remains the Core Tech Theme. Drawing parallels with overseas industry development trends, there is long-term optimism for areas like AI infrastructure and applications, chips, intelligent manufacturing, and biopharmaceuticals, with a focus on investment opportunities in tech stocks during the economic transformation and upgrading process.

AI is still viewed as the main theme in technology, while some undervalued stocks with recovery potential are also worth attention. Within semiconductors, the focus is on high-cyclicality segments like equipment and materials, as well as certain design and wafer manufacturing niches. Additionally, ongoing attention will be paid to emerging future industry hotspots to identify promising long-term investment candidates.

Qu Shaojie: Surging AI Demand Underpins Tech Stock Performance. The US stock market was generally volatile in Q2, yet tech stocks performed relatively well, primarily benefiting from the continued surge in AI-related demand, especially strong growth in data centers, high-performance computing, and memory chips.

The rising demand for AI computing power is driving sustained high activity in upstream hardware, with semiconductor equipment, memory chip, and electronic component companies benefiting from accelerated AI server deployments. Concurrently, system and application software firms are also gaining, as increased demand for AI model training and data processing provides growth momentum. On the capital expenditure front, long-term computing power orders signed by large model developers are leading to upward revisions in cloud providers' capex expectations, offering a clearer growth outlook for the tech supply chain.

Yu Huan: Seeking High-Growth Stocks Within the Broader AI Sphere. Looking ahead to Q3, with international tensions potentially easing and a stable domestic environment focused on steady economic progress, AI sector momentum is expected to continue. Against this backdrop, the strategy will involve searching for high-growth sub-sectors and individual stock opportunities within the broader AI domain.

This specifically includes: 1) The AI infrastructure chain, such as computing power, algorithms, and connectivity; 2) New quality productive forces sectors supported by policies and showing marginal improvements, like semiconductors, robotics, and advanced manufacturing; 3) Growth-oriented sub-sectors within the broader consumption category.

Han Lin: Focus on Growth and Manufacturing Sectors. For Q3, the market's main theme is expected to gradually transition into a phase of "earnings realization + cycle validation." Technology and growth sectors are still likely to be the primary focus, but caution is warranted against volatility risks arising from valuation divergence and crowded trades. Sectors like new energy, innovative drugs, defense, and high-end equipment could become diffusion directions if mid-year reports validate performance or industry catalysts emerge.

The strategy will center on industry trends, use earnings realization as an anchor, and simultaneously consider valuation and market positioning, aiming to control drawdowns and avoid excessive concentration in any single high-momentum direction.

Within the growth sector, key focus areas include optical modules, PCBs, copper connections, liquid cooling, server power supplies, advanced packaging, semiconductor equipment and materials, domestic computing power chips, and supporting ecosystems—all segments with tangible earnings delivery capabilities. In manufacturing, areas to watch include energy storage batteries, overseas residential/utility-scale storage, data center backup power, solid-state battery materials, mid-to-late-stage lithium battery equipment, and specialized materials where supply-demand dynamics are improving first.

Yang Weiwei: Focus on Defense Aero-Engines and Semiconductors. Current focus is on two main areas: defense aero-engines and semiconductor self-sufficiency.

Regarding defense aero-engines (gas turbines and aircraft engines, which share highly overlapping supply chains), from a fundamental perspective, ongoing power shortage pressures are driving demand for gas turbine installations, coupled with the recovery of the overseas commercial engine market and the start of a major maintenance cycle, indicating a positive industry outlook. From a medium-to-long-term view, domestic commercial engines are on the cusp of industrial breakthroughs, and domestic large aircraft have been designated as a key new industry and track for cultivation and development.

For semiconductor self-sufficiency, two main themes are favored: First, domestic computing power, which holds significant upside potential as large language models' coding and agent capabilities leap forward, gradually making them new productivity tools. Second, semiconductor equipment and materials, which are poised to benefit from the acceleration of domestic memory and advanced process capacity expansion.

Liu Jiang: Market Structure May Become More Balanced. A positive stance on the equity market is maintained for the medium to long term, primarily for the following reasons:

In terms of upside potential, the cumulative gains of major indices are not excessive, suggesting overall room for further advancement; the current dynamic valuations of leading companies are not high, implying relatively controllable risks; meanwhile, the overall liquidity environment remains accommodative, providing support for equity market valuations.

From a macro backdrop perspective, profound changes in the international landscape are prompting global capital to reassess the investment value of high-quality Chinese assets. Concurrently, continuous breakthroughs in AI technology are driving the world into a new cycle of innovation, which is expected to catalyze the emergence of investment opportunities.

Overall, technology and growth sectors are still viewed as the market's main theme, with the market structure potentially becoming more balanced. Specific directions of focus will include: First, emerging tech growth areas driven by AI, such as computing power, applications, terminals, smart vehicles, robotics, low-altitude economy, and commercial aerospace. Second, resource commodities and high-quality pro-cyclical assets like consumer sectors where fundamentals are expected to improve.