Significant economic meetings had previously boosted market confidence, but news of potential US military action dampened sentiment again, leading the Hang Seng Index to continue its adjustment last week. On April 30, Iran submitted a new 14-point negotiation proposal to the US, setting a one-month deadline for talks. The proposal includes reopening the Strait of Hormuz, lifting the US maritime blockade, and permanently ending hostilities within Iran and Lebanon. Iran made concessions, no longer requiring the US to lift the blockade of the Strait of Hormuz before face-to-face talks between representatives. Former President Trump stated he would quickly review Iran's newly submitted conflict resolution plan but expressed skepticism about its acceptability. Additionally, on May 1, Trump threatened that US forces would "take over Cuba" upon returning from concluding hostilities with Iran. US media supporting Trump suggested he "seemed to be joking." In recent news, Trump's visit to China in May remains unchanged, which is positive for improving bilateral relations. The US April non-farm payrolls report is due on May 8; market expectations are for slower job growth, and if the data falls significantly short of expectations, it could strengthen anticipation for Federal Reserve rate cuts. Overall, as long as the US refrains from military action, the market retains opportunities for recovery.
AI continues to be the market's strongest hotspot. The US Pentagon is collaborating with eight AI companies to deploy AI on classified networks for combat operations. The domestic substitution process is accelerating, with institutions forecasting that by 2026, excluding self-developed chips from major internet companies, domestic high-performance AI inference chips will total approximately 3 million units: first-tier players like Ascend, Cambricon, and Hygon contributing 1.6-1.7 million units; second-tier players like Moore Threads and Biren close to 1 million units; and Kunlun芯 over 300,000 units. The chip sector warrants continued attention.
Berkshire Hathaway's 2026 annual shareholders meeting was held in Omaha. Greg Abel ushered in the "post-Buffett era" for Berkshire, with Q1 cash reserves reaching a record high of $397 billion. The company reiterated its core four stock portfolio pillars: Apple, American Express, Moody's, and Coca-Cola. Abel believes data center construction will drive significant growth for utilities. This direction is also noteworthy.
Property markets saw intensive policy catalysts, with cities like Shenzhen, Guangzhou, Tianjin, and Wuhan introducing new policies to stabilize the sector. Following the implementation of Shenzhen's new property policies, some real estate agencies reported doubled secondary home contract signings, with out-of-town buyers beginning to enter the market, positively impacting inventory reduction for property developers.
[Stock of the Week] VGT (02476) reported Q1 2026 revenue of 5.519 billion yuan, a year-on-year increase of 27.99% and a quarter-on-quarter increase of 6.66%. Net profit attributable to shareholders was 1.288 billion yuan, up 39.95% year-on-year and 20.73% quarter-on-quarter. Gross margin was 34.46%, up 1.09 percentage points year-on-year and 0.95 percentage points quarter-on-quarter. Net profit margin was 23.34%, up 1.99 percentage points year-on-year and 2.72 percentage points quarter-on-quarter. The company's profitability improved, with net profit growth outpacing revenue growth, primarily due to further optimization of its product mix. On the expense side, Q1 financial expenses reached 104 million yuan, an increase of nearly 76 million yuan year-on-year, mainly due to increased exchange losses. Q1 R&D expenses were 155 million yuan, up over 25 million yuan year-on-year. Additionally, the company reported net fair value change gains of 45.87 million yuan in Q1, mainly from increased fair value of held-for-sale shares. As of Q1 2026, inventory stood at 3.905 billion yuan, an increase of 740 million yuan from the end of 2025, indicating active stockpiling to meet strong downstream demand.
From a demand perspective, the rapid evolution of global artificial general intelligence (AGI) technology is driving continuous expansion in AI training and inference needs. Demand for AI computing power and AI servers is growing rapidly, requiring large volumes of high-specification PCBs. AI PCBs represent the most certain growth segment within the PCB industry. Industry trends suggest signal transmission bandwidth will continue to upgrade, material grades will keep improving, and the layers and stages of high-layer count boards and advanced HDI will increase. Some processes will require longer processing times and higher complexity, further consuming high-end capacity, leading to a trend of reduced effective output area. Medium-term, supply for high-end products is expected to remain relatively tight, with sufficient downstream demand to absorb new capacity.
On the supply side, as of Q1 2026, construction in progress reached 5.17 billion yuan, an increase of 1.56 billion yuan from the end of 2025. The company continues to increase capital expenditure to ensure rapid capacity expansion. New factory construction involves stages like building construction, equipment installation, customer audits, sample testing, order placement, and volume increases. Initial production line磨合 and gradual capacity release are standard industry processes. Domestically, factory construction and equipment installation typically require about a year for preparation. Given the company's mature, stable production process systems and quality control standards, along with the use of reliable technical solutions and equipment configurations, yield improvement rates are relatively fast. As new factory capacity is released, it will provide strong support for further revenue growth.
[Industry Observation] From April 29 to 30, during the Q1 earnings season, North American tech giants密集上调 their 2026 capital expenditure guidance, with the combined scale exceeding $650 billion. This aims to match record levels of AI cloud service backlogs. These actions validate that enterprise AI demand is exploding at a pace exceeding expectations. AI infrastructure has clearly moved from a phase of technological competition into a super-cycle characterized by multi-year capital expenditure, with growth certainty and rates far surpassing previous industry estimates. Quoting notes from an international investment bank analyst: "The stunning shift in capital allocation by the Magnificent Seven continues to intensify. However, this trend may have reached an inflection point this quarter (for some, not all); not due to slowing spending (quite the opposite), but due to a discernible shift in returns. Data from some large tech companies is again staggering: Microsoft plans $120 billion in capital expenditure over the next 6 months; Amazon's capex this year will exceed $200 billion, Alphabet around $185 billion, Meta around $135 billion. Perhaps equally important, Google Cloud revenue grew 63% year-on-year (operating income now exceeding $20 billion), backlogs doubled quarter-on-quarter to $460 billion, with multiple enterprise deals over $1 billion signed; Microsoft's AI business grew over 120% year-on-year (a significant figure, with annualized recurring revenue now at $37 billion); AWS grew 28% year-on-year (the fastest since the high-growth period of 2021). Additionally, Amazon disclosed revenue commitments for its Trainium custom chips exceeding $225 billion..."
For Hong Kong stocks, consider focusing on: (1) LENOVO GROUP (00992): Continued upward revisions to North American cloud provider capex primarily target AI servers, storage, liquid cooling, and enterprise AI infrastructure. Lenovo's ISG Infrastructure Solutions Group business aligns with AI servers and data center equipment. (2) FIT HON TENG (06088): This aligns more with the "AI server high-speed connectivity/connectors/cables" theme. AI data centers involve more than just GPUs; internal high-speed interconnects, thermal management, power supplies, and connectors see increased value. Backed by the Foxconn system, FIT HON TENG benefits from trends in AI servers, networking equipment, and high-speed transmission components, potentially offering higher elasticity than traditional hardware stocks. (3) ASMPT (00522): This follows an upstream equipment logic. Increased demand for AI chips, high-bandwidth memory, and advanced packaging will boost sentiment for semiconductor packaging equipment. If the market begins to reprice the sustainability of AI computing capital expenditure, ASMPT stands to benefit from the advanced packaging and semiconductor equipment cycle recovery.
[Market Data] HKEX data shows the total number of open contracts for Hang Seng Index Futures (May) is 123,672, with a net open interest of 45,272 contracts. The settlement date for Hang Seng Index Futures is May 28, 2026. With the Hang Seng Index at 25,777 points, the bull warrant concentration area is near the central axis, while the bear warrant concentration area deviates, indicating short-selling pressure in Hong Kong stocks. However, with A-shares mostly on holiday this week, Hong Kong stocks may follow US market gains.
[Closing Thoughts] This week, market sentiment seems pulled in two directions: on one side, continued increases in US AI capital expenditure are reigniting risk appetite along the tech chain; on the other, Hong Kong markets are waiting for concrete realization, where strong expectations meet weak patience. Listening to the Berkshire Hathaway meeting, the most substantial takeaway wasn't "what to buy next," but rather a restrained judgment: there are many good companies, but few good prices; cash flow and safety margins will always be more important than narratives. The key impression from recent days is that the AI super-cycle is real, but it won't lift all stocks equally. Ultimately, the companies that endure will be those that can solidly deliver on orders, capacity, and profits. For Hong Kong stocks to advance steadily, it depends not on chasing trends, but on building certainty.
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