In the first half of the year, the A-share market exhibited significant performance divergence, with technology stocks leading the charge, while substantial disparities emerged between different listing sectors and industries.

Regarding potential shifts in market style going forward, institutions widely believe technology will remain the primary market theme, though they also caution that capital may begin flowing into some undervalued sectors.

The market split is first evident across different listing boards and industries.

Wind data shows that as of the close on June 30, the Shanghai Composite Index, the Shenzhen Component Index, and the CSI 300 Index recorded cumulative gains of 3.16%, 19.82%, and 7.55%, respectively, for the first half.

In contrast, the ChiNext Index and the STAR 50 Index surged by 35.58% and 53.99%, respectively.

Analyzed by sector under the Shenwan primary industry classification, only 10 out of 31 industries posted gains.

The Electronics and Communications sectors led the entire market with substantial increases of 86.29% and 73.59%, respectively.

Meanwhile, sectors like Commerce & Retail, Agriculture, Forestry, Animal Husbandry & Fishery, Beauty & Personal Care, and Food & Beverage declined by 29.42%, 25.26%, 24.86%, and 19.52%, respectively.

The performance gap between the best and worst-performing sectors exceeded 115 percentage points, highlighting the stark contrast within the A-share market.

From the perspective of individual stock performance, the disparity in investor experience was even more pronounced.

Wind statistics indicate that among 5,528 listed stocks, only 1,715, or 31%, rose in the first half.

Within this group, 362 stocks doubled in value, and 11 saw gains exceeding 500%.

Of the 362 doubling stocks, 70 were from the semiconductor industry, with the remainder primarily from technology sectors closely linked to artificial intelligence, such as electronic chemicals, optoelectronics, and components.

As of June 30's close, leading AI chip company Cambricon Technologies surged 7.66%, with its total market capitalization exceeding 1 trillion yuan, becoming the first STAR Market company to reach this milestone, epitomizing the market's extreme divergence in style.

Data also shows that leveraged funds, a significant driver of the recent market uptrend, have grown substantially.

Wind data reveals that the margin financing and securities lending balance climbed from 2.54 trillion yuan at the end of last year to 3.02 trillion yuan by June 30, an increase of nearly 500 billion yuan.

An economist from Qianhai Kaiyuan Fund attributed the extreme divergence in the A-share market during the first half to China's ongoing economic transformation.

Sectors like semiconductors and computing power within the technology industry have experienced explosive earnings growth driven by demand from the AI revolution, while growth in some traditional industries has remained sluggish, collectively driving capital towards the tech sector.

An analyst from the China Market Association's Finance Committee noted that as technology industries like AI, computing power, and semiconductors enter a new cycle of high prosperity, capital continues to concentrate on the technology theme.

Concurrently, with the macroeconomy still in a recovery phase, profit improvements in traditional sectors like consumption and real estate have been relatively slow.

The market exhibits clear characteristics of存量博弈, where funds cluster in the highest-growth areas, leading to very pronounced结构性行情.

Regarding the A-share market's trajectory for the second half of the year, particularly whether there will be a style rebalancing away from technology's dominance, institutions hold differing views but generally agree that technology will remain the core market theme.

The chief strategy analyst at Kaiyuan Securities believes that reviewing market adjustments since April 2025 reveals they were caused by multiple factors, including technology narrative disruptions, liquidity pressures, and crowded microstructures.

Following each adjustment, technology remained the core theme; the adjustments were not signals of the tech theme's end but rather a re-screening within the tech growth narrative itself.

China International Capital Corporation Ltd. (CICC) observed that volatility in the AI sector has increased since the second quarter.

Previously leading sectors like semiconductors, optical modules, and PCBs have seen trading拥挤度 reach historically high levels, with recent trends showing signs of扩散 into less crowded upstream raw materials and infrastructure areas related to AI.

The firm pointed out that against the backdrop of a continuously strengthening AI industry trend, the current market behavior is more likely to manifest as style diffusion rather than a systematic style shift.

Some institutions advise preparing for two scenarios.

Guotai Junan Securities suggested that the value/dividend segment currently has overall valuations in a historically reasonable range, with dividend yields at a medium-to-high historical level, coupled with a low-interest-rate environment, entering a zone of high配置性价比.

The firm proposed using dividends as a foundation and capturing超额收益 from high-growth sectors, advocating a balanced allocation across the AI computing and application chain, advanced manufacturing, energy transition, and cyclical recovery sectors.

Founder Securities also recommended a dual approach: optimizing holdings within the tech theme by avoiding纯题材高拥挤标的 and increasing holdings in hardcore tech leaders with strong earnings visibility; and exploring recovery opportunities in顺周期板块 with low valuations, as falling oil prices lower raw material costs and a recovery in domestic and foreign manufacturing could lead to upward profit revisions for顺周期 sectors.

The analyst from the China Market Association's Finance Committee stated that the market in the second half will likely gradually move towards rebalancing, but not through a simple style switch; instead, there will be轮动 between the tech theme and顺周期 sectors.

As稳增长 policies continue to take effect, the economic fundamentals improve, and valuations in some tech sectors rise, capital may moderately扩散 into undervalued areas such as consumption, healthcare, advanced manufacturing, and parts of the quality property chain.

CITIC Securities believes that looking ahead to the second half of 2026, as AI commercialization enters an earnings verification phase, the tech rally will shift from valuation expansion to industrial realization and structural differentiation.

The primary challenges currently are the high valuations and crowded positioning in global tech stocks, but model iteration continues to accelerate.

From a long-term perspective, "adapting to AI" may gradually become the main theme and source of opportunity for the next stage, with the核心 being the continuous solidification and amplification of intrinsic comparative advantages.