China Merchants Securities says the recent sharp market adjustment following
Meta's compute sale is a tactical move to lift ROIC in a high‑CapEx phase, not
evidence of broad compute overcapacity. The firm views the industry as shifting
from pure CapEx expansion into a ROIC‑verification stage; the pullback was
amplified by prior outsized gains in generalized compute names and leveraged
flows, creating a short‑term liquidity‑driven negative feedback loop. After the
liquidity shock, the bank judges the AI structural trend intact: storage chip
supply‑demand gaps remain, MLCC price increases persist, and indium phosphide
shortages continue, supporting scope for a tech recovery. It also recommends
selectively targeting mispricings between mid‑year earnings and share prices.
