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

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.