The U.S. and Iran have reached an agreement, with the Strait of Hormuz expected to reopen on June 19, sparking a global equity market rally and a surge in risk assets, while oil prices have tumbled sharply. The three-month blockade of the Strait of Hormuz has significantly impacted the global crude oil market. As a critical chokepoint for global oil transportation, the Strait controls 20% of global oil and gas shipments, and its closure kept international oil prices persistently high. Facing domestic midterm election pressures and rising inflation, U.S. President Trump sought a negotiated settlement with Iran. The reopening of the Strait of Hormuz is expected to substantially pressure crude prices, with oil prices falling sharply in response, thereby easing the trend of further rising inflation in the United States. Recent U.S. CPI data for May exceeded 4%, hitting a three-year high, raising market concerns that the new Federal Reserve Chairman, Warsh, might raise interest rates by year-end. Currently, the retreat in international oil prices will alleviate inflationary pressures. Coupled with Trump's desire to maintain a strong stock market ahead of the midterm elections, the likelihood of a rate hike by year-end has largely diminished, providing significant support for asset prices. Equity markets in Europe, the U.S., Japan, South Korea, as well as A-shares and Hong Kong stocks, have all seen strong rebounds, signaling the end of this round of market correction. Previously, tech stocks in the A-share market experienced significant pullbacks, but now, driven by this major positive development, a strong rebound is anticipated, and the market's subsequent direction is likely to continue favoring the tech bull trend.
After nearly three weeks of adjustment, the market has rebounded sharply again today, with the ChiNext and STAR Market indices, which saw larger declines earlier, bouncing back more than 3%, and many individual stocks posting substantial gains. This confirms my earlier view that this correction was a pullback within an uptrend, a correction to the previous overly rapid gains, and likely does not alter the long-term trajectory of the A-share market. The time for a tech bubble burst is not yet here.
When positioning in tech stocks now, focus should be on leading companies within the six major tracks. These sectors have already undergone corrections of 10% to 20%, or even 20% to 30%. Such deep adjustments suggest short-term profit-taking may be largely over, making it an opportune time to consider accumulating positions on dips. Beyond the tech sector in this bull market, attention should also be paid to "HALO assets," such as non-ferrous metals, rare earths, power, grid equipment, and new energy sectors like wind, solar, and storage. These are not industries that will be obsolete in the AI era but are essential infrastructure. The "HALO asset" concept, proposed by major institutions like Goldman Sachs and Morgan Stanley, represents heavy-asset, low-volatility industries that still have significant growth potential in the AI era, with relatively low valuations and high dividend yields. I have previously suggested a strategy of "left hand tech, right hand HALO assets" for this market cycle—offensive yet defensive, maintaining a relatively balanced allocation. The tech bull represents the areas most benefiting from the AI era, concentrated in growth stocks, while "HALO assets" are primarily traditional sectors. A balanced allocation helps avoid risks associated with focusing on a single track. The current tech bull run has entered its mid-to-late stage, with increased market volatility and more frequent sharp swings. Recent performance in the South Korean market is particularly telling: circuit breakers triggered on both steep declines and sharp rallies, reflecting growing divergence among investors regarding tech stocks, which warrants caution.
This past May Day, I attended the Berkshire Hathaway Annual Shareholders Meeting in the U.S. for the eighth time, meeting numerous domestic and international investment institutions and investors, including international financial firms like Morgan Stanley. There is widespread recognition of the current AI technological revolution, but divergence exists on when this AI tech bubble might burst. I previously mentioned Warren Buffett's apt analogy for a bubble: it's like a dance party where the ladies are beautiful, the gentlemen are handsome, everyone is drinking champagne and dancing, and no one wants to leave. Although everyone knows that after midnight, everything turns into mice and pumpkins, everyone wants to leave at 11:50 PM. Unfortunately, there's no clock in the room to tell the time. This illustrates that the market has not yet reached a consensus. A Wall Street adage states, "When there is consensus, it is the most dangerous time." If everyone is enthusiastically embracing the AI tech bubble, it might indicate the bubble is nearing its peak. The current existence of divergence suggests the AI tech bubble has not yet topped.
After the Omaha meeting, I led a group of entrepreneurs to Wall Street to visit financial institutions like Morgan Stanley and Bloomberg. A Morgan Stanley executive humorously remarked that they advise clients to "dance closest to the door." For this AI tech bubble, one can actively participate but must also be mindful of risk management. I previously provided a useful observation indicator: watch the performance of the Nasdaq Index, as this rally is led by the Nasdaq. As long as the Nasdaq holds up, the outlook is favorable. If U.S. stocks experience a sharp overnight decline, for instance, a single-day Nasdaq drop exceeding 5%, consider halving positions after the market opens. If the Nasdaq falls more than 10% in a day or accumulates a decline exceeding 20% over a period, it may be time to consider if the bubble has burst. When U.S. stocks stabilize and rebound, the A-share market tends to follow. The synchronization between A-shares and U.S. stocks, especially in tech shares, is increasingly strong. Many A-share tech companies are part of U.S.-based supply chains, such as those in the NVIDIA, Tesla, Google, Apple, and OpenAI ecosystems. The performance of these tech giants' large models also impacts domestic tech companies. Therefore, for this tech stock rally, monitoring when the U.S. tech bubble bursts is crucial. Before a bubble bursts, the market may only experience repeated fluctuations and corrections without a trend reversal. This conviction should be maintained.
The market is currently rebounding from the earlier significant correction, with previously hard-hit sectors like semiconductors, chips, computing power, and algorithms showing particularly strong rebounds. The robotics sector has surged since May; despite some recent pullback, it has quickly resumed its upward trend. The potential listing of Unitree Robotics could make it the first humanoid robotics stock on the A-share market. The upcoming unveiling of the Optimus V3 robot from Elon Musk's company in July-August are key drivers for the humanoid robotics sector's surge and could open up medium-to-long-term upward opportunities. Robots are the physical carriers in the AI era, akin to computers, iPads, and smartphones in the internet era—humanoid robots are the terminals of the AI era. The most mainstream way to achieve physical AI in the future may well be through robots. Recent collaborations, such as the partnership between Jensen Huang and Wang Xingxing for NVIDIA and Unitree to jointly develop AI robots, are positive signals. OpenAI founder Sam Altman has also announced plans to enter the robotics field. As major players enter, the humanoid robotics industry could embark on a spectacular upward trajectory. Early last year, I proposed that humanoid robotics could become China's fourth major industrial track, following home appliances, mobile phones, and new energy vehicles. This is a long-term, promising sector, not a short-term speculative concept. Therefore, investors should consider accumulating positions from a medium-to-long-term perspective on dips. In humanoid robotics, the "pick-and-shovel" companies are the component manufacturers, including leading firms in细分领域 like lead screws, sensors, reducers, and joints. These warrant close attention, especially those entering the Tesla supply chain, as major company certification serves as a litmus test for corporate quality.
Since early last year, I have proposed that six major tracks form the core of this tech bull market. The sequential performance of these six tracks has preliminarily validated this view.
The first major track is semiconductors and chips, representing the "pick-and-shovel" providers for the AI era. Developing AI is inseparable from semiconductors, making this one of the best-performing sectors over the past year.
The second major track is computing power and algorithm infrastructure, serving as the "water, electricity, and coal" of the AI era, with demand experiencing substantial growth.
The third major track is humanoid robotics, a long-term investment sector equivalent to the most important physical terminal in the AI era, recommended for focused allocation.
The fourth major track is commercial aerospace. The recent successful IPO of SpaceX, which rose nearly 20% on its debut, reaching a market capitalization of $2.1 trillion, and making Elon Musk's net worth exceed $1 trillion—a record in human history—has shown the market the immense future development opportunities in commercial aerospace. China has also undertaken significant initiatives in commercial aerospace this year, including numerous rocket and satellite launches, holding a leading position in this field.
The fifth major track is solid-state batteries. Solid-state battery technology is gradually achieving breakthroughs. CATL founder Robin Zeng recently stated in an interview that solid-state batteries are expected to enter mass production next year. Although costs are currently high, they are expected to decrease with mass production, potentially gradually replacing lithium-ion batteries and revolutionizing the battery field. The solid-state battery supply chain is also a future direction worth watching.
The sixth major track is biopharmaceuticals. Biopharma represents the application of AI in the medical field, including brain-computer interfaces, AI healthcare, and AI pharmaceuticals, potentially ushering in an era of human longevity. In the future, AI methods may enable the development of drugs targeting almost all types of cancer, bringing hope to patients and making human longevity a reality.
These six major tracks constitute the investment主线 of this tech bull market. Investors can consider accumulating positions during each major market correction to seize the opportunities presented by the tech bull run.
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