BOCOM INTL released a research report stating that previous market discussions on an AI bubble coincided with uncertainty around the Federal Reserve's interest rate cuts, leading to a pullback in chip design and wafer foundry companies closely tied to AI. The firm believes potential risks of global AI infrastructure overcapacity remain manageable overall and maintains a positive outlook on AI infrastructure-related investment opportunities in 2026. Key insights are as follows:
**Divergence in Tech Stock Performance, A-Shares Outperform** Over the past month, global tech indices showed mixed trends. From November 11 to December 10, the MSCI Information Technology Index rose 0.5%, slightly outperforming the MSCI World Index (+0.3%). In contrast, China’s Wind Information Technology Index gained 2.8%, becoming the only sector with positive returns, while the CSI 300 fell 1.3% during the same period. Moore Threads saw a positive market response post-listing. Hong Kong’s Hang Seng Index dropped 4.3%, likely due to external volatility, with the Hang Seng Tech Index down 5.8%, trailing only the media-heavy Hang Seng Media Index.
Valuation-wise, U.S. tech stocks rebounded after a late-November dip, which BOCOM INTL attributes to uncertainty over Fed rate cuts and AI bubble discussions. Meanwhile, China’s Shenwan Electronics and Semiconductor indices saw P/E ratio recoveries.
**Memory Prices Continue Surge, Supply Shortages Expected Through 2026** According to DRAMexchange, the average spot price of DDR5 (16Gb) rose from $7.676 at end-September to $27.167 by late November. DDR4 (8Gb) and NAND (128Gb MLC) contract prices also climbed 11% and 15% MoM in October. The current memory upcycle has exceeded expectations in both duration and price hikes. While HBM supply constraints may ease by 2026, overall memory prices are expected to stay firm throughout the year.
**Semiconductor Equipment Imports Sustain Strong Growth** China’s semiconductor equipment imports hit $3.86 billion in October, up 26% YoY, marking five consecutive months of robust growth. BOCOM INTL maintains its forecast of a $52 billion domestic semiconductor equipment market in 2025 (+5% YoY). Given ongoing industry expansion, the firm remains bullish on China’s semiconductor equipment sector, projecting a further 4.2% growth to $54.2 billion in 2026.
**TSMC November Revenue Up 24% YoY** TSMC reported November 2025 revenue of NT$343.6 billion (+24% YoY, -6% MoM). Advanced process/packaging capacity is expected to remain tight in 2026, with 2nm production likely launching in 4Q25 and 1.6nm in 2H26. The firm highlights TSMC’s technological edge in advanced nodes and believes its pricing power over downstream clients is strengthening. The introduction of 2nm/1.6nm nodes may not lead to price cuts for 3/5nm products.
**Investment Recommendations** NVIDIA’s recent stock performance lags peers, but its dominance in AI computing remains intact—BOCOM INTL reiterates a Buy rating with a $245 target. The U.S. Commerce Department’s potential approval of H200 exports to China could marginally boost NVIDIA’s TAM expectations. Additionally, domestic substitution in China’s computing chips is progressing. The firm favors local semiconductor supply chain opportunities, particularly **NAURA (002371.SZ)** and **OmniVision (603501.SH)**.
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