The chip sector may need to consolidate going forward, with opportunities in undervalued areas such as semiconductor equipment, materials, and AI applications.
On August 25, the STAR 50 Index surged another 3.2%, with technology stocks continuing their strong performance. Domestic chip concept stocks led gains, with Cambricon (688256) and Hygon Information (688041) rising over 10%.
Data shows that since August this year, technology stocks have become the market's leading sector, with the STAR 50 Index gaining nearly 23%, while the Shanghai Composite Index rose 8.8% over the same period. The AI computing hardware supply chain (including chips, PCB, and liquid cooling) became the core driver of this tech rally. The three major technology subsectors - computers, electronics, and telecommunications - posted August gains of 18.7%, 15.2%, and 22.1% respectively, significantly outperforming the broader market. Capital activity remained high with pronounced sector rotation characteristics.
A public fund manager told media that A-shares have gained approximately 15% to 17% this year, ranking in the upper-middle tier globally. However, the recent chip sector rally appears overheated in the short term, with semiconductor trading volume on August 23 accounting for 10% of total A-share volume - an extremely high level. The sector may need consolidation going forward, with opportunities in undervalued areas such as semiconductor equipment, materials, and AI applications.
**Structural Differentiation in Tech Stocks**
Since August, the AI chip sector has been the main driver of the tech rally, with the STAR Chip Index surging over 30%. Leading stocks like Cambricon and Hygon Information hit multiple daily limits during the month. The DeepSeek-V3.1 released on August 21, which uses UE8MO FP8 Scale parameter precision, pointed toward next-generation domestic chip design. This news further accelerated domestic chip gains, with Cambricon breaking through 1,000 yuan on that day and hitting a 20% daily limit on the 22nd. Hygon Information and Hetai Group (002402) reached historic highs.
Meanwhile, liquid cooling and power supply equipment for AI servers continued the rally. Data shows the Wind Liquid Cooling Server Index gained 29% in August, with related stocks like InvTech (002837), Euro Technologies (300870), and Sichuan New Materials (301489) all posting August gains exceeding 100%.
In contrast, robotics and AI application sectors lagged in August with average gains of only 10% to 12%. The fund manager believes the rise of domestic chip concepts essentially results from the convergence of technological breakthroughs, policy incentives, and domestic substitution expectations. The pullback in some robotics stocks reflects the combined effects of concept speculation cooling, lack of performance validation, and capital siphoning. In AI applications, consumer electronics and IoT represent important entry points, with some consumer electronics stocks showing clear recovery in August. AI concepts are expected to extend from hardware to terminal applications.
**Are There Still Opportunities?**
After this rally, how much upside remains for tech stocks?
Industry insiders believe that purely from a valuation perspective, tech stocks are currently at historically high levels. According to Wind data, as of August 25, the STAR 50 Index's dynamic P/E ratio reached 180.78x, the highest level since August 2020, exceeding previous peaks in 2021 and 2023, showing significant valuation premium.
From a share perspective, STAR 50 ETF (588000) outflows are accelerating, decreasing by 164,300 shares on August 26, following a massive 7.853 billion share reduction the previous week, with August cumulative outflows of 17.565 billion shares. STAR 50 ETF shares have declined from 90.93 billion at year-start (January 2, 2025) to current 62.445 billion, with corresponding assets under management falling from 91.575 billion yuan to 84.531 billion yuan, a decline of about 7.7%.
Since August, capital has clearly shifted from growth sectors like electronics and computers toward undervalued sectors like financials and chemicals. Data shows non-bank financial ETFs saw net inflows exceeding 6 billion yuan in August, basic chemical ETFs gained 2.09 billion yuan, while electronics sector ETFs experienced net outflows of 50.79 billion yuan.
A private fund manager analyzed that from a short-term perspective, adjustment is inevitable for tech stocks after consecutive gains, especially in AI, chip, and domestic computing power directions, where profit-taking could be considered. For those preferring growth stocks, relatively value-oriented options include domestic optical modules, switches, and consumer electronics components, which haven't risen much yet.
The public fund manager also believes domestic computing chips are currently more driven by sentiment speculation, requiring attention to eventual production capacity and internet giants' domestic chip procurement ratios. While domestic chips have long-term potential, they're currently in a high volatility state. Short-term opportunities exist in undervalued areas like semiconductor equipment, materials, and AI applications in the technology sector.
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