China International Capital Co said the AI rally is showing signs of diffusion
and market repricing is shifting toward upstream picks‑and‑shovels suppliers.
A‑shares have delivered a pronounced structural rally YTD: ChiNext and STAR 50
are up 30.9% and 51.2%, with AI as the core theme. Since Q2 AI-sector volatility
has increased; previously leading semiconductors, optical modules and PCBs face
Historically high trade crowding, and recent flows are moving into less crowded
upstream materials and infrastructure — notably minor metals, electronic fabrics
and optical fiber. CICC judges that with the AI trend intact, the market is more
likely to display style diffusion than a systemic style rotation, making select
upstream sub-sectors the current focus.
