CITIC Securities Says AI Stock Correction Nears End; Markets Shift Focus From Inflation to AI Growth
AI correction nearing completion: CITIC Securities said the scale and duration of the recent correction in core AI stocks are approaching those of the Chinese new-energy stock downturn from late 2021 to April 2022.
Hardware valuation reset: The first round of valuation adjustments in AI hardware stocks may be nearing its end as expectations for the pace of growth in the AI supercycle moderate.
Key indicators to watch: Memory prices, GPU computing rental rates and cloud service providers’ profit margins will help assess whether underlying AI growth remains intact.
Inflation loses market influence: CITIC said US September CPI inflation of 3.7% year-on-year and PPI inflation of 6.3% failed to sustain upward pressure on long-term Treasury yields.
AI growth becomes a pricing anchor: The firm argued that markets are increasingly focused on the AI investment cycle and its potential slowdown rather than a conventional demand-driven recession. It cautioned that current pricing signals do not yet confirm a lasting trend.
Sector rotation possible: US equities could see capital shift from AI-related stocks toward energy, defensive consumer staples and healthcare, while Hong Kong stocks could benefit from a reversal in overseas AI hardware positioning and potential index-related reallocations.
Key takeaway: CITIC Securities believes the AI stock correction may be approaching its end, but the outlook depends on whether fundamental growth indicators remain resilient. Its assessment is a market view, not confirmation that the downturn is over.
AI correction nearing completion: CITIC Securities said the scale and duration of the recent correction in core AI stocks are approaching those of the Chinese new-energy stock downturn from late 2021 to April 2022.
Hardware valuation reset: The first round of valuation adjustments in AI hardware stocks may be nearing its end as expectations for the pace of growth in the AI supercycle moderate.
Key indicators to watch: Memory prices, GPU computing rental rates and cloud service providers’ profit margins will help assess whether underlying AI growth remains intact.
Inflation loses market influence: CITIC said US September CPI inflation of 3.7% year-on-year and PPI inflation of 6.3% failed to sustain upward pressure on long-term Treasury yields.
AI growth becomes a pricing anchor: The firm argued that markets are increasingly focused on the AI investment cycle and its potential slowdown rather than a conventional demand-driven recession. It cautioned that current pricing signals do not yet confirm a lasting trend.
Sector rotation possible: US equities could see capital shift from AI-related stocks toward energy, defensive consumer staples and healthcare, while Hong Kong stocks could benefit from a reversal in overseas AI hardware positioning and potential index-related reallocations.
Key takeaway: CITIC Securities believes the AI stock correction may be approaching its end, but the outlook depends on whether fundamental growth indicators remain resilient. Its assessment is a market view, not confirmation that the downturn is over.