Recent de-leveraging pressures have caused sharp volatility in the tech sector, sparking market debate and reflecting a key shift in the AI narrative—from a phase of aggressive expansion ("who can burn cash") to one of profitability ("who can generate earnings"). On the industry level, Q2 earnings reports from overseas tech giants show continued heavy investment in AI infrastructure, but near-term free cash flow constraints have raised doubts about the sustainability of capital expenditure. In the short term, consensus is still being built amid divergent views, and the tech sector is experiencing a transitional pain period as it shifts from being valuation-driven to fundamentals-driven. As risk appetite shows marginal improvement in August, can the tech theme regain favor? Has the window for positioning after the adjustment opened? Let's review the latest insights from fund managers at Great Wall Fund's "Tech+" strategy.

Chen Liangdong believes the macro economy will likely show a pattern of slow aggregate recovery combined with structural transformation and upgrades. The breakthrough progress in AI technology could serve as a major catalyst for this structural trend. Therefore, AI industries and those driven by AI transformation are key long-term investment focuses. However, over the medium term, AI industry sentiment and market expectations may experience periodic fluctuations, leading to a gradual divergence among sub-sectors. A bottom-up approach is needed to identify the execution ability and fundamental quality of individual stocks. Additionally, in traditional industries, some high-quality leading companies show strong earnings resilience and are trading at historically low valuations, warranting further research.

Chu Wenyu is focusing on domestic equipment and computing power. Looking ahead to August, the market has the potential for an oversold rebound, and it is unlikely that any new sector can absorb the capital currently in tech. If a rebound trend forms, it will likely be led by tech, though the market may become more balanced after the initial rally. The strategy involves concentrating on the tech track, seeking marginal changes within the core AI logic. Current focus areas include domestic equipment and computing power, actively looking for mispriced opportunities during the oversold rebound. Attention is also paid to changes in the overseas AI narrative, such as downstream applications and edge computing.

You Guoliang suggests that the defense sector may offer left-side valuation opportunities. Following a sharp sell-off in July, the market has strong rebound potential, with overall recovery expected in August. In the short term, tech stocks, particularly AI hardware, have strong fundamentals, but the main issue is poor ownership structure. Non-AI sectors have better ownership structures but lack fundamental logic. Therefore, the market may rebound through sector rotation, awaiting further consensus. AI is likely to remain a relatively favorable direction early in the rebound, but divergence may emerge after some gains. After the July decline, valuations in the defense sector appear more reasonable, with better ownership structures. While Q2 earnings reports may create short-term pressure, the sector is expected to see gradual earnings recovery and narrative strengthening over a one-year horizon, making it suitable for left-side value positioning.

Zhao Fengfei believes a significant tech rebound is likely. The market's liquidation in July seems nearly complete, and there has been no fundamental deterioration in the AI sector. A notable tech recovery is expected in the second half of the year, with an oversold rebound in computing power possibly starting anytime. The market is expected to become more balanced after the downturn, moving beyond a single focus on computing power, so new marginal directions are worth watching. Meanwhile, domestically developed open-source models continue to push performance higher. This narrative shift strengthens the domestic logic relative to overseas comparisons and also creates opportunities for previously suppressed areas like cloud computing and applications to recover, easing the "model eats everything" thesis. Key investment opportunities in tech include: 1) AI computing power chain, including overseas and domestic computing power, with a preference for domestic; 2) Semiconductors, including equipment, materials, and some design segments, waiting for an oversold recovery; 3) Other rebalancing directions, including cloud computing and applications, robotics, autonomous driving, and lithography machines.

Yu Huan is focusing on stocks with strong earnings support. In July, market style underwent a dramatic shift, influenced by both trading and narrative factors. The global AI supply chain experienced a sharp correction, and the market turned defensive. By sector, banking, food and beverage, and coal performed well, while electronics, telecommunications, building materials, and machinery lagged. Entering the August earnings season, the market is expected to favor high-quality stocks with strong short-term earnings and clear medium-to-long-term development guidance. After the significant tech sector correction in July, some companies already offer good investment value, which will be a key focus.

Han Lin is focusing on high-quality growth areas. For August, the market is more likely to show a pattern of "oscillating towards recovery - rebalancing - mid-year report verification," rather than quickly returning to a single tech beta trend. Domestically, the situation remains one of "aggregate pressure, structural strength, policy support." Traditional cyclical sectors are unlikely to fully recover, but structural opportunities exist in policy-driven capital expenditure, high-tech manufacturing, and some service consumption sectors. Overseas, the trend of AI capital expenditure has not reversed, but interest rates, energy prices, and capital returns may limit valuation expansion. For the third quarter, excess returns are more likely to come from areas of "high-quality growth, policy-driven capital expenditure, and fundamental improvement from low levels." Key focus areas include: "Six Networks" infrastructure driven by policy capital expenditure; innovative drugs, medical devices, and CXO companies that can deliver on clinical and order progress; AI quality growth sectors with verifiable orders, profits, and cash flow; resource sectors with supply constraints and improving free cash flow; and financials, high-dividend stocks, and Hong Kong-listed assets with low valuations and strong cash flow.

Yang Weiwei believes domestic computing power still has upside. The significant tech stock correction in July was mainly due to overly concentrated ownership structures, leading to market rebalancing. The tech sector may face a "narrowing" trend, requiring a focus on sub-sectors with steeper growth curves and clearer competitive landscapes. Current focus areas include domestic computing power, defense and aerospace, and semiconductor expansion. Domestic computing power fundamentals are just beginning to materialize, with further upside potential. The wafer fab expansion direction has seen some realization following the major IPO, but further catalysts from related company listings are expected, and the sector's fundamentals are relatively certain, suggesting an oscillating upward trend.

Liu Jiang is focusing on high-quality assets with strong fundamentals. The market bottom is likely established. The strategy focuses on two main themes: first, returning to fundamentals, actively seeking oversold, high-quality assets with good winning odds and risk-reward profiles; second, identifying new sub-sectors with fresh logic. Key focus areas include: 1) Infrastructure like computing power: strong and sustained momentum, with a focus on optical communications, space computing, domestic computing chips, PCBs, liquid cooling, and storage, while tracking new technology-driven investment opportunities. 2) Application side: new business models driven by models and agents, and practical B-end application scenarios. In embodied intelligence, focus on changes in humanoid robots, autonomous driving, unmanned vehicles, and drones. 3) Policy and emerging areas: tracking strategic emerging industries and future industries highlighted in the "15th Five-Year Plan," as well as potential new directions with explosive growth.