--- title: "CITIC Securities: Still optimistic about the main line of U.S. technology stocks, currently preferring the mid-to-downstream segments of the overseas computing power chain" type: "News" locale: "en" url: "https://longbridge.com/en/news/292402370.md" description: "CITIC Securities released a research report, remaining optimistic about the main line of U.S. technology stocks, with a preference for the mid-to-downstream segments of the overseas computing power chain. The report pointed out that the recent overseas market has doubts about the sustainability of the AI narrative, and the performance of computing power hardware is mainly driven by price increases rather than volume growth, which is a cyclical logic. As the market focus shifts to sustainability, the evolution of bargaining power is key. Given the increase in AI adoption rates among U.S. companies and the alignment of technology investments with long-term trends, it is expected that market competition will drive efficiency improvements and create new demand, thus enhancing the attractiveness of U.S. stocks compared to Japanese and South Korean stock markets" datetime: "2026-07-12T12:25:02.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/292402370.md) - [en](https://longbridge.com/en/news/292402370.md) - [zh-HK](https://longbridge.com/zh-HK/news/292402370.md) --- # CITIC Securities: Still optimistic about the main line of U.S. technology stocks, currently preferring the mid-to-downstream segments of the overseas computing power chain According to the Zhitong Finance APP, CITIC Securities released a research report stating that in the process of AI popularization, end users do not always choose the models that consume the most computing power and have the best performance, but often face financial constraints related to Token budgets. The strong performance of computing power hardware in the second quarter of this year was mainly driven by price increases rather than volume growth. As the market focus shifts from scarcity to sustainability, overseas markets, represented by the South Korean stock market, have recently faced adjustments. Computing power is not in excess, but the evolution of bargaining power is becoming increasingly critical. It has been noted that the AI adoption rate among American companies is rising, and the overall technology investment intensity in the corporate sector aligns with long-term trends. It is believed that market competition mechanisms will drive more companies to use AI to improve work efficiency, leading to new demands for computing power services, AI models, and applications. The outlook for US tech stocks remains optimistic, with a current preference for the mid-to-lower reaches of the overseas computing power chain, and a favorable view of the attractiveness of US stocks compared to Japanese and South Korean stock markets. ## The main points of CITIC Securities are as follows: **Recent concerns about the sustainability of the AI narrative in overseas markets have intensified.** US stocks experienced a structurally driven market in the first half of this year, led by technology, with the stock prices of various ecosystem companies in the AI industry chain diverging in June. Computing power hardware became a star sector in the global market in the second quarter. However, since late June, news causing market fluctuations in the tech sector has emerged one after another, leading to increased volatility in overseas markets represented by the South Korean stock market, and the consensus among global funds "gathering" around semiconductors seems to be loosening. **The strong performance of overseas computing power hardware is mainly driven by price increases rather than volume growth, which is a typical cyclical logic.** The strong momentum of technology hardware in the second quarter was primarily driven by rising product prices rather than a surge in delivery quantities. South Korea's semiconductor export volume even saw a year-on-year decline of about 25% in May this year. This indicates that the recent market trading foundation comes from the high premium of physical scarcity, which is not significantly different from the trading logic of previous storage cycles and traditional bulk commodities. Essentially, it is a trading phase of supply and demand mismatch, although the duration of the current cycle's upward trend may be longer and the potential higher. Market expectations for overseas semiconductor manufacturers have become relatively optimistic, and the evolution of their bargaining power is worth noting. **As the market focus shifts from scarcity to sustainability, the economic account of AI investment becomes increasingly important.** The core variable determining the credibility of the AI narrative lies in the prospects for end commercial applications. Indeed, AI models tend to perform better as they consume more computing power, but the Token budget should be a more critical factor driving end companies' AI investment behavior. Ordinary users find it difficult to ignore financial costs merely for the pursuit of high performance, which will ultimately influence upstream bargaining power through the capital expenditure willingness of cloud manufacturers. It has been noted that the AI adoption rate among American companies is increasing, and the overall technology investment intensity in the corporate sector aligns with long-term trends, without financially overextending future demand. It is believed that market competition mechanisms will drive more companies to use AI to improve work efficiency, leading to new demands for computing power services, AI models, and applications. Compared to the high expectations for the simultaneous rise in quantity and price in the upstream of the overseas computing power chain, there is greater recognition of the logical deduction of the "Jevons Paradox" in the mid-to-lower reaches. **After an extreme market, seek more flexible trading directions.** Currently, the elasticity of traditional cyclical sectors in the US stock market is inevitably constrained by high interest rates, while technology investments have historically shown lower sensitivity to interest rate fluctuations, maintaining a more optimistic outlook on technology as the main theme. Against the backdrop of significant price increases in overseas technology hardware stocks and relatively weaker performance in non-hardware sectors, the latter seems more likely to bring fundamental surprises, with a current preference for the mid-to-lower reaches of the computing power chain. This logic also applies to the trade-off between the US stock market and the Japanese and South Korean stock markets. If the supply-demand gap in the upstream of the computing power chain tends to ease, and the decline in Token prices along with market competition mechanisms can promote end users to increase their usage of AI services, then the US stock market may regain better attractiveness compared to the Japanese and South Korean stock markets. After multiple tests and contacts, both the US and Iran should have gradually become familiar with each other's intentions and bottom lines; the most intense period of conflict has passed. With expectations of moderate growth in the US economy and not overly abundant liquidity, the allocation value of US stocks relative to US Treasury bonds remains optimistic. **Risk Factors:** Global market liquidity or sentiment changes exceed expectations; technological advancements, corporate performance, policy changes, or unexpected events impact exceed expectations; overseas economic momentum is weaker than expected or inflation exceeds expectations ### Related Stocks - [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md) ## Related News & Research - [HMS: Record revenue, profit, and margins driven by robust demand and strategic investments](https://longbridge.com/en/news/292571703.md) - [Chinese chip start-up launches 8-inch production line pilot for 2D chips](https://longbridge.com/en/news/292371927.md) - [China's June trade tops forecasts buoyed by AI boom](https://longbridge.com/en/news/292560923.md) - [Singapore's economy grew 5.7% in Q2, easing from 6.3% in previous quarter: Advance estimates](https://longbridge.com/en/news/292545098.md) - [The stock-market rally now hinges more on AI than oil](https://longbridge.com/en/news/292403512.md)