On Wednesday (November 4), the market staged a rapid afternoon rebound, with AI, as a high-beta growth sector, being the first to benefit from sentiment recovery as capital flowed back noticeably.
The benchmark index of the Huabao ChiNext Artificial Intelligence ETF (159363), which focuses on leading optical module companies, dipped and then recovered throughout the day, closing up 7.81% on heavy volume.
Among constituent stocks, the computing power sector exploded across the board, with a total of 11 constituent stocks rising more than 10%. Among them, the three optical module giants rebounded collectively, with Eoptolink Technology Inc Ltd (ASX: 300502) up more than 13%, Zhongji Innolight Co Ltd (ASX: 300308) up more than 11%, and T&S Communications Co Ltd (ASX: 300394) up more than 10%.
In the afternoon, the market's "key player" emerged. The clarity of the midterm elections eased uncertainty, safe-haven capital flowed back, and high-beta sectors such as AI recovered notably. On the news front, the Democratic Party gained an advantage in the midterm elections and may reclaim control of the U.S. Congress. Geopolitical risks may be expected to recede, safe-haven capital returned to risk assets, and AI, as a high-beta growth sector, was the first to benefit from sentiment recovery. Tech stocks are particularly sensitive to the transmission of falling oil prices and easing interest rate pressure, with capital preferentially concentrating on the computing power mainline that offers high earnings visibility.
Cao Xuchen, fund manager of the Huabao ChiNext Artificial Intelligence ETF (159363), stated that the conclusion of the midterm elections significantly eased uncertainty, and global tech investment sentiment repaired from pessimistic to neutral. This round of decline severely damaged the chip structure of the tech sector, and the future will be an investment system rebuilt from scratch, requiring re-validation of each sector's fundamentals rather than a one-step V-shaped rebound. As the AI computing power industry migrates from second-order to first-order dynamics, high-quality leading companies are more likely to persist through the cycle. Regarding optical module investment, a review of three rounds of adjustments since 2023 shows that short-term macroeconomic, financial, or technical disturbances are often amplified into the end of long-term trends, but industrial evolution and earnings delivery have repeatedly corrected such perceptions; this round of correction is also a window to re-examine the value of optical interconnect and the fundamentals of leading companies.
Guosheng Securities noted in its review that the optical module sector has experienced three rounds of deep corrections since the AI rally began in 2023, and after each round, valuation repair and new highs were achieved through earnings delivery. The contradiction in the current third round of adjustment has shifted from the demand side to the financial and financing sides: under high interest rates, North American cloud providers' free cash flow is under pressure, and the market worries that high financing costs will backfire on capital expenditure growth, compounded by slowing ARR realization and supply chain review anxiety, making panic sentiment easily transmitted to the hardware side. The institution emphasized that "financing friction" is not "demand disappearance," and the logic of the optical interconnect industry has not been broken. The common pattern of the three adjustments is that the market always tries to linearly extrapolate short-term disturbances into the end of long-term trends, while industrial evolution often disproves pessimistic expectations with orders and financial report data. Leading companies are currently in a "platform period" of rapid 1.6T volume ramp-up, and short-term mismatch is merely a buildup on the growth curve; after crossing the critical point, earnings will be more fully released.
*To position in optical module leaders plus AI applications, it is suggested to pay attention to the Huabao ChiNext Artificial Intelligence ETF (159363) and its off-exchange feeder funds (Class A 023407, Class C 023408), focusing on optical module CPO leaders while also covering AI applications. The benchmark index has about 30% weight in "Zhongji Innolight + Eoptolink + T&S Communications," making it a core standard-bearer for AI computing power. Data source: Shanghai and Shenzhen Stock Exchanges, Wind, etc. Note: As of October 31, 2026, according to the CNI Index, the top three constituent stocks of the ChiNext Artificial Intelligence Index are Zhongji Innolight (weight 11.49%), Eoptolink (weight 9.08%), and T&S Communications (weight 8.51%). Reminder: Recent market volatility may be significant, and short-term gains or losses do not predict future performance. Investors should invest rationally based on their own financial situation and risk tolerance, and pay close attention to position and risk management. *Institutional views reference source: Guosheng Securities' "Three-Year Review of Optical Modules: Attribution and Insights from Three Rounds of Adjustments." ETF fund-related fee description: When investors subscribe or redeem fund shares, the subscription and redemption agency may charge a commission of no more than 0.5%. On-exchange trading fees are subject to actual charges by securities companies, and no sales service fee is charged. Feeder fund-related fee description: Huabao ChiNext Artificial Intelligence ETF Initiated Feeder C does not charge subscription fees; redemption fees are 1.5% within 7 days and 0% on or after 7 days; sales service fee is 0.3%. Huabao ChiNext Artificial Intelligence ETF Initiated Feeder A subscription fee is 1% for amounts under 1 million yuan, 0.6% for 1 million yuan (inclusive) to 2 million yuan, and 1,000 yuan per transaction for 2 million yuan (inclusive) and above; redemption fees are 1.5% within 7 days and 0% on or after 7 days; no sales service fee is charged. According to the fund manager's assessment, the risk levels of Huabao ChiNext Artificial Intelligence ETF, Huabao Hong Kong Stock Connect Information Technology ETF, and Huabao STAR Chip ETF are R4-medium-high risk, suitable for aggressive (C4) and above investors. The suitability matching opinion should be based on the sales institution. Risk disclosure: Huabao ChiNext Artificial Intelligence ETF passively tracks the ChiNext Artificial Intelligence Index. The index base date is December 28, 2018, and the launch date is July 11, 2024. The annual returns of the index from 2021 to 2025 were: 17.57%, -34.52%, 47.83%, 38.44%, and 106.35%, respectively. The annualized volatility of the index over the same period was 23.73%, 27.34%, 38.02%, 45.42%, and 41.1%, respectively. The constituent stocks of the index are adjusted in due course according to the index compilation rules, and its back-tested historical performance does not predict future performance of the index. The index constituent stocks mentioned in this article are for demonstration only, and individual stock descriptions do not constitute any form of investment advice, nor do they represent the holdings or trading activities of any fund under the manager. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only, and investors must be responsible for any investment decisions they make independently. In addition, any views, analyses, and forecasts in this article do not constitute any form of investment advice to readers, nor do they assume any responsibility for direct or indirect losses caused by the use of the content of this article. Fund investment involves risks, past performance of a fund does not represent its future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. Fund investment requires caution. A MACD golden cross signal has formed, and these stocks are rising well!
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