Hong Kong's stock market is poised for a "Davis Double Play" in 2026, driven by valuation recovery, earnings growth, and thematic resurgence, according to an investment strategy report. The analysis framework highlights four key AI investment themes to systematically capture structural opportunities in Hong Kong's tech sector during the AI era. Investors are advised to follow the industry progression from "computing infrastructure → application expansion → device and robotics commercialization" when selecting sector leaders.
The Hang Seng Index is expected to regain upward momentum, with the Hang Seng Tech Index likely to outperform the broader market. As the core repository of China's new economy assets, the tech sector may become the strongest driver of market rebound. This report systematically categorizes 60 Hong Kong-listed tech companies into four core themes: "Big Tech Ecosystems → AI Computing → AI Applications → AI Devices," providing a clear roadmap for navigating AI-driven opportunities.
**Theme 1: Internet Giants – Ecosystem Revaluation in the AI Era** AI is transforming internet behemoths from traffic competitors to ecosystem capability leaders. Cloud services are accelerating (with doubled capital expenditures and stable margins), AI-enhanced advertising delivers instant monetization (15%-20% click-through rate improvement), and ecosystem gateways face restructuring via AI agents. Key investment targets include TENCENT (solid fundamentals with AI gateway expansion), BABA-W (highest cloud service upside), and KUAISHOU-W (video AI commercialization leader).
**Theme 2: AI Computing Supply Chain – Strong Fundamentals Counter "Bubble" Claims** Persistent earnings beats, sustained cloud Capex intensity, and chip shortages underscore robust global computing demand, refuting bubble concerns. The report identifies three high-conviction opportunities: 1) Networking upgrades (optical modules/connectors); 2) Domestic semiconductor manufacturing (foundries); 3) Critical equipment/materials for power-performance optimization (packaging tools, CCL, GaN power).
**Theme 3: AI Applications – Commercialization Breakthrough Phase** Investment now hinges on monetization proof. Accelerating trends include: - SaaS tools evolving into "AI agents" lifting ARPU; - AIGC driving user/revenue growth via lower creation barriers; - Programmatic advertising's "AI flywheel" boosting profits and narrowing valuation gaps.
**Theme 4: AI Devices & Robotics – Hardware Revolution and Mass Production Inflection** 2026 marks the tipping point for AI-defined hardware and robotics scaling. Key developments: - Apple Intelligence and XIAOMI-WR's MiMo model driving edge computing upgrades; - Cross-industry hardware plays (e.g., AI Pin, TPU) benefiting optical/acoustic/motor/OEM suppliers; - Humanoid robots (Tesla Optimus, Ubtech) approaching 10,000-unit production scale.
**Stock Highlights:** - **TENCENT**: Cloud/AI gateway expansion; - **LENOVO GROUP-R**: Global AI PC leader (31.1% share) awaiting server profitability and AI PC demand catalysts; - **XIAOMI-WR**: "Smart Living+AI" strategy tempered by near-term memory price pressures; - **BABA-W**: Cloud growth leader with margin resilience.
The report emphasizes selective exposure to companies aligned with these themes while monitoring near-term headwinds like memory price fluctuations impacting Android supply chains and device margins.
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