On August 17, the market staged a strong rebound, but by August 18 it quickly shifted to divergence. However, this has not stopped certain stocks from accelerating their upward momentum, nor has it undermined the counterattack trend that has been established since August. A viral video titled "Niu Lai" has triggered a wave of consecutive limit-up moves in stocks associated with the word "niu" (bull), such as Luoniushan and Tianshan Bio. Meanwhile, Yiming Food hit another limit-up on August 18, having surged nearly 200% since late July.
Among technology stocks, the PCB player Jinlu Electronics has not only recovered its July losses but has also accelerated to record new historical highs recently. Optical communication leaders such as TFC Optical Communication and Shiji Photon have both staged V-shaped reversals. Zhongshi Technology has delivered three consecutive 20% limit-up boards. The rising heat in concept stocks and track stocks suggests that market risk appetite is warming up. Yet, investors now face a critical question: after this rebound, with many stocks having accumulated significant gains, should they stay or exit?
Can this rebound sustain itself? Among the leading sectors such as optical communications and memory chips, which still offer excess returns? This article focuses on these topics.
The Rally Is Spreading to a Wider Range
TFC Optical Communication has surged 70% since August. Market optimism is gradually increasing as the index and individual stock trends expand. The structural wealth effect continues to amplify in certain stocks. From August 1 to August 18, the number of stocks gaining more than 50% reached 91, compared to 86 on August 17, 49 on August 14, and 39 on August 13. Among them, track stocks led by computing power and optical communications are strongly outperforming. For instance, TFC Optical Communication is up 70% since August, and it has set performance targets for 2027–2029, requiring net profit growth of no less than 120%, 320%, and 560% compared to 2025 levels under a recent stock incentive plan.
Many stocks have transitioned from "A-shaped" declines to "V-shaped" rallies, further repairing market confidence. Tai Chen Optical, for example, fell over 50% in July but has gained more than 70% since August. According to its financial reports, its single-quarter revenue in Q2 2026 hit a record high. Additionally, "smart money" from northbound capital significantly increased its position in the stock during Q2, adding 5.07 million shares to reach 6.519 million shares.
Some stocks have not only recovered their July declines but have also hit new highs. Jinlu Electronics, a PCB track stock, issued a strong reversal signal from the bottom and then rallied consecutively. On July 21, it hit a low-level 20% limit-up, reversing the previous long bearish candle. Since then, it has risen steadily, hitting another 20% limit-up on August 17 and reaching a new historical high on August 18. Jinlu Electronics is a typical example, but the more critical question is where the next "Jinlu Electronics" lies.
Beyond the stocks listed in Table 1, another standout is CXMT, which surged 12% on August 17, pushing its market value above 4 trillion yuan. Previously, many worried about the siphon effect of CXMT and intensified internal divergence. However, the market has not followed that script. Instead, it has forged a chain: CXMT's stock price rise → memory sector sentiment warming → related industry chain stocks rallying in tandem.
From a market perspective, the rebound in A-share AI computing, optical communications, and memory stocks is closely linked to U.S. stocks. Names like SanDisk and Micron Technology have recently surged, nearly recovering their July losses, while Lumentum's gains are approaching its May historical high. Some investors are anxious about missing the rally, others worry about chasing highs, and some believe the right-side rally has begun, offering another "buy on dips" opportunity.
Duan Yongping Adjusts Positions in NVIDIA While Hillhouse Heavily Boosts SanDisk and Micron Technology
The rebound in AI optical communications, computing power, and memory chips is driven by multiple factors, including strong earnings from leading companies and long-cycle industry prosperity expectations. For instance, Anthropic, which is expected to stage one of the largest U.S. IPOs in history, reported preliminary Q2 revenue exceeding $11.5 billion, up at least 14-fold year-over-year. This underscores the earnings delivery at the AI application end, validating the industry's prosperity and sustainability for computing infrastructure and optical communications.
Additionally, NVIDIA announced on August 14 that its Spectrum-X Ethernet silicon photonic switch has entered full mass production. Notably, this is the world's first 200G/lane CPO Ethernet switch system to reach mass production. This milestone is a critical step in unlocking order fulfillment and commercial value for the CPO and optical interconnect industry chain, and it is a key catalyst driving the warming of A-share AI optical communications and memory chips.
Against the backdrop of a positive AI industry cycle, recent Q2 2026 13F filings from well-known investors and major institutions reveal differing attitudes toward the AI supply chain. For example, Duan Yongping and Hillhouse have taken contrasting approaches. Duan Yongping's H&H International Investment recently disclosed its Q2 U.S. stock holdings, with a total market value of approximately $19.1 billion (about RMB 138 billion). Despite this massive scale, it holds fewer than 20 positions, with its top holding remaining Apple, valued at $7.8 billion.
In Q2, H&H reduced positions in seven stocks, including NVIDIA, Apple, Google, and Microsoft, and fully exited two positions (Taiwan Semiconductor Manufacturing and CrowdStrike). Meanwhile, it increased its stakes in Pinduoduo, Berkshire Hathaway Class B shares, and Disney, while initiating a new position in Alibaba. H&H made a significant adjustment to NVIDIA, cutting 7.56 million shares to 6.28 million shares, bringing the holding value down to $1.256 billion. Notably, NVIDIA's stock price hit record highs during Q2.
Looking back, H&H first built its NVIDIA position in Q1 2025 and significantly increased it in both Q4 2025 and Q1 2026, with quarter-end holdings of 7.2371 million and 13.8438 million shares, respectively. H&H's Q2 reduction of over 50% in NVIDIA is viewed by some as "profit-taking at highs" under a value investing framework. Overall, H&H's Q2 adjustments reflect a deliberate effort to optimize its portfolio structure and avoid over-concentrating in the AI computing power sector.
In a similar vein, Hillhouse also reduced its NVIDIA position in Q2, cutting holdings by over 70% to 80,000 shares, while also initiating a new position in Alibaba. Hillhouse's total U.S. stock holdings are close to $1 billion, with fewer than 20 positions. In contrast to H&H, Hillhouse increased its stake in Taiwan Semiconductor Manufacturing during Q2, boosting holdings by over 10% to a quarter-end market value of $230 million. Taiwan Semiconductor Manufacturing remains Hillhouse's largest U.S. holding.
Hillhouse's preference for the AI supply chain is also evident in its significant additions to memory leaders Micron Technology and SanDisk. In Q2, Hillhouse increased its Micron Technology holdings by 25,000 shares (up over 280%) to 34,000 shares, valued at approximately $39.73 million. It also added 10,000 SanDisk shares (up over 190%) to 16,000 shares, worth around $36.38 million. Both Micron Technology and SanDisk were new positions initiated by Hillhouse in Q1 of this year.
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