One surge followed by a plunge — that is the direct impression tech stocks have left on the market in recent months.
On November 12, the STAR 50 Index rose as much as 4.96% intraday before closing up just 0.73%; the optical communication leaders that had surged the previous day broadly spiked and retreated, with Zhongji Innolight (300308.SZ), Changxin Technology (688825.SH), Eoptolink Technology (300502.SZ) and Foxconn Industrial Internet (601138.SH) among the top names by net capital outflow.
Over two trading sessions, optical communication and GPUs took turns leading the rally, but each also ran into selling pressure in succession.
Under a stock-game dynamic, tech stocks are attempting a repair, but after two consecutive days of gains, a sharp plunge hit on the afternoon of the 12th, with Zhongji Innolight recording 33.622 billion yuan in single-day turnover and losing nearly 39 billion yuan in market value in one day.
Such action has once again gripped investors' nerves: since July, several rebounds in AI hardware have failed to form a sustained trend, and behind the spike-then-retreat pattern, who exactly is slamming tech, and is it a case of clustered funds using the rebound to cut positions?
Optical communication and GPUs rotate in rebound, STAR and ChiNext boards spike then retreat
In the morning session of November 12, the main line of the tech rebound switched to GPUs and semiconductor chips.
The STAR 50 Index touched an intraday high of 1,364.88 points, with a maximum gain of 4.96%; the STAR Composite Index rose as much as 3.96% intraday.
In the afternoon, market conditions abruptly changed, and the tech sector dived collectively.
Profit-taking on the AI hardware side was evident, suppressing tech stock sentiment, with Zhongji Innolight closing down 6.11% at 508.90 yuan; Foxconn Industrial Internet, Eoptolink Technology, Victory Giant Technology (300476.SZ), Changxin Technology and Tianfu Communication all fell together, while gains in Cambricon Technologies (688256.SH) and Moore Threads (688795.SH) clearly narrowed.
Capital shifted toward defensive sectors late in the session, with liquor and banks finding support.
Judging from single-day share price amplitude, the paper losses for investors who chased highs intraday were not encouraging.
As of the close on the 12th, of the 39 stocks in the optical communication sector, 32 closed lower, among which 14 stocks had price amplitude exceeding 7 points, while Zhongji Innolight, Lianxun Instruments and Focuslight Technologies closed lower with amplitude exceeding 10%.
It is not only funds that chased tech intraday that got trapped.
Taking Zhongji Innolight as an example, the stock rose unilaterally in the afternoon of the 11th to close at 542 yuan, then opened at 532 yuan and closed at 508.9 yuan on the 12th, meaning chips bought in the afternoon of the 11th are all underwater.
From an index perspective, this rebound has lasted about a week.
The STAR 50 Index rebounded 15.68% cumulatively from its intraday low of 1,132.33 points on November 3 to its close on the 12th, with a maximum rebound of about 20.5% based on the intraday high of 1,364.88 points; the ChiNext Index rebounded 5.60% cumulatively after probing 2,376.28 points intraday on November 4.
The STAR board's elasticity was clearly superior, while the ChiNext Index was dragged by heavyweights such as new energy and had a relatively limited rebound.
Divergence grows after deep adjustment, institutions watched for selling into rebound
Divergence during the tech rebound has already emerged, and whether the spike-then-retreat is a common pullback during a rebound or a window for clustered funds to reduce positions is not yet a consensus view in the market.
Looking back, this round of tech sector adjustment began in July, and through early November the ChiNext Index fell 44.42% cumulatively, while the STAR 50 Index fell 47.42% cumulatively.
Among them, the STAR 50 Index retreated from its yearly high of 2,255.25 points on July 1 to an intraday low of 1,132.33 points on November 3, with a maximum drawdown of 49.79%, close to halving; many formerly hot tech leaders retreated about 70% from their highs.
Faced with the rebound after the huge decline in the dual-innovation boards, market participants are clearly divided.
In a November 8 report titled "Rebound Has Arrived, Firm Up Confidence," Huaan Securities stated that its growth industry cycle investment rhythm framework shows the market entered an oversold rebound phase of about one month in early November, with AI upstream and midstream hardware the most favored direction, covering optical modules, PCB, CPO, optical fiber, liquid cooling, storage and the semiconductor equipment chain; referencing historical patterns, the growth style rose about 15%, the main line industry about 20%, and AI downstream applications may see rotational diffusion opportunities.
Shenwan Hongyuan Securities also believes a rebound could be triggered at any time, but short-term space is limited, and a more effective medium-term rebound may appear around the turn of the year.
Guosen Securities, comparing with the two prior tech bull market adjustments in 2015 and 2021, pointed out that this round's STAR 50, electronics and communications have fallen about 46% to 49% from their highs, with adjustment adequacy comparable to the previous two rounds, and directions such as agents and humanoid robots in physical AI are expected to become new catalysts.
Zhao Xi, Investment Director of Shanghai Yinghao Asset Management Co., Ltd., holds a different view.
In an interview, he said that tech stocks accelerated toward a top in May and June this year, and the sector's earnings logic was not clearly damaged, but share prices had already priced in expectations for the next several years in advance, with speculation exceeding fundamentals, making it the main disaster area of this decline.
In Zhao Xi's view, after September 22, the tech sector fell fast and deep in the short term, so it inherently had oversold rebound demand, and coupled with policy positives, encouragement of buybacks and relending for stock buybacks and increases provided conditions for a rebound.
Regarding the market rotation in the past two trading sessions, Zhao Xi said the direct catalyst for the November 11 surge was market news that Microsoft was lobbying against proposed restrictions by the U.S. Federal Communications Commission (FCC), opposing limits and advocating continued purchases of Chinese optical modules; domestic substitution directions such as Suzhou Centec Communications, Hygon Information Technology and Cambricon also performed in the past two days.
On the morning of the 12th, however, news circulated that TSMC had cut Nvidia's production plan by 30%, putting pressure on the computing power chain and triggering concentrated selling.
Zhao Xi believes that although the computing power industry chain has adjusted significantly so far, valuations have only returned to a fairly reasonable level and cannot yet be called undervalued, making a large-scale rally in tech stocks unlikely in the short term; even if a major rally appears later, the leaders will likely be new names, and the biggest prior gainers will find it hard to lead again, with the sector having oversold rebound opportunities but a low probability of sustained strength.
He judges the overall market will remain focused on bottoming, with policy support, ample liquidity and a low interest rate environment forming the main support.
Regarding potential influencing factors for the market, Zhao Xi flagged two aspects: first, the continuous shrinkage of real estate and the stock market will create negative feedback on the consumption side through changes in household wealth and expectations, and this will emerge gradually; second, public funds are still dominated by redemptions from fund investors, and without new capital inflows, tech stocks should not be expected to rise too high at the current position.
On the rhythm and chip risk of tech stocks, CSC Financial pointed out that the market is still in the second round of deleveraging, and the key to confirming a bottom lies in whether incremental market-stabilizing funds can continue to cover reduction pressure, with signals such as stabilizing margin financing, continued ETF absorption and leading decliners no longer making new lows worth tracking, and in allocation it recommends dividend directions such as banks and utilities as the base position.
The root of the divergence may be found in the clues from public fund third-quarter reports.
According to fund third-quarter holdings statistics, the total market value of the top ten heavily held stocks in the public fund tech sector in the third quarter of 2026 was about 468 billion yuan, all from the electronics and communications industries, with the top five in order being Zhongji Innolight, Eoptolink Technology, Changxin Technology, Yuanjie Technology and Suzhou Dongshan Precision Manufacturing; the number of funds holding Zhongji Innolight and Eoptolink Technology reached 1,768 and 1,286, respectively.
In terms of overall allocation, active funds' tech allocation in the third quarter was 56.30%, down 7.72 percentage points quarter-on-quarter, but still overweight by 27.75 percentage points; TMT allocation was 53.78%, down 8.49 percentage points quarter-on-quarter, with both at the 98.8% historical percentile since 2005, second only to the second quarter of 2026.
Electronics and communications together accounted for 89.87% of tech allocation, and position adjustments mainly reflected internal rotation within hardware, without yet switching to the software side, and chip clearing and rebalancing are expected to take time.
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