A-share AI Hard Tech Market Trend: Phased Valuation Repricing Rather Than Fundamental Paradigm Shift

: Currently, it is more inclined to be a “phased valuation repricing” and style shift rather than a “fundamental paradigm shift” in valuation logic. The supporting factors for this judgment include: structural repricing under policy-industry trend resonance, tilt of trading and capital from traditional consumption to hard tech and AI, and expansion of pricing methods from pure profit and cash flow to growth, scarcity, and policy dividends. However, to confirm a “fundamental shift”, continuous verification of profit realization, policy stability, and external technology/sanction environment is still needed.

• DeepSeek’s technological breakthroughs (including the release and open-sourcing of mixture-of-experts and inference models) are regarded as a landmark progress of China in AI inference and application, triggering repricing and pursuit of China’s “computing power base” related targets in domestic and overseas markets. DeepSeek topped the U.S. free app list in early 2025, gained attention from Silicon Valley, and was interpreted by multiple media as a new paradigm of "low cost and high performance.
• This “AI computing power + domestic replacement” sentiment directly transmitted to chip and complete machine supply chains: Leading domestic AI chip design companies benefit from procurement demand for NVIDIA alternatives by local large model vendors and cloud service providers; Computing power hardware suppliers like Foxconn Industrial Internet (601138.SS) see both volume and price increases in AI servers and high-speed switches.

• The State Council and regulatory authorities have repeatedly stated support for AI, intelligent connected vehicles, and robotics, etc., and strengthened procurement and support for local computing power, forming policy endorsement.
• Geopolitical frictions and supply chain disruptions strengthen the “tech security” premium, and the market incorporates “hard tech” and “independent control” into pricing weights.

• Foxconn Industrial Internet (601138.SS): Its ranking in public fund holdings jumped from 157th in Q2 to 7th among top ten heavyweight stocks in Q3 2025; Index products like 5G Communication ETF included it in the top four holdings. This shows that institutional capital is concentrating from traditional sectors to AI computing power hard tech leaders.
• Valuation comparison: Foxconn Industrial Internet’s current P/E TTM is about 42.36, significantly higher than traditional manufacturing and most consumer sectors, reflecting the triple premium of “growth + scarcity + track β”.
• Reassessment of traditional “stock king” style: Kweichow Moutai’s (600519.SS) static valuation level (P/E about 19.55) is relatively stable, and its “stock king” positioning reflects more value and defensive attributes rather than the core of this round’s β-driven trend. This means that in the style shift, AI and hard tech sectors take on more growth and elasticity roles.

• Traditional logic: Focus on sustainable profit and cash flow (e.g., typical of consumer leader “stock king”).
• Current logic superimposed: Growth (high growth in AI computing power demand), scarcity (domestic replacement/independent control), policy dividends (government procurement and industrial fund support). The three-dimensional expansion amplifies the discount weight of long-term cash flow and market share, allowing lower current profit and higher valuation multiples in the short term.

• Infrastructure prioritizes over end applications in AI era: Core links like computing power chips, high-speed switches, and liquid cooling cabinets have improved order visibility and bargaining power, and first enjoy valuation expansion.
• Label reshaping from “OEM to computing power base”: For example, Foxconn Industrial Internet transforms from communication equipment and precision manufacturing to a core global AI computing power infrastructure supplier, and the market valuation center rises with business structure and order visibility.

• Local high β: Capital and sentiment resonance are significant in sub-sectors like AI computing power, domestic chips, and robotics.
• Global still differentiated: Valuation rise has not benefited all sectors; valuations of some real estate chain, consumer, and export-oriented industries are still suppressed. The overall risk preference increase is structural rather than systematic.

• Sustainability of high valuation multiples depends on continuous realization of orders and profits. If capital expenditure slows down or overseas demand fluctuates later, growth and scarcity premiums may correct quickly.
• Cash flow pressure of some hard tech companies still needs vigilance: As reported, Foxconn Industrial Internet had a net outflow of operating cash flow in the first three quarters of 2025, mainly due to increased stockpiling of AI servers; attention should be paid to operating leverage and payment collection rhythm.

• Policy sustainability: Adjustments in intensity or rhythm of policy tools like AI subsidies, domestic procurement ratio, and tech industry funds may directly affect the support of valuation logic.
• Geopolitics and supply chain: U.S. technology controls, export license policies, and possible tariff measures pose uncertainties to upstream chip and equipment supply.

• Some targets in this round of market trend have large short-term gains, active turnover and financing, with a high proportion of sentiment-driven components. If macro liquidity tightens or risk events are triggered, the retracement risk of crowded trading is greater.

• Cambricon (688256.SH): Real-time quotation of Cambricon was not successfully obtained due to data interface restrictions, so this answer cannot verify whether it surpasses Moutai in market value with API data. Public reports show that Cambricon achieved record profits and significant year-on-year revenue growth in the first half of 2025, and turned losses into profits with the help of DeepSeek’s momentum, but the market value ranking of “new stock king” should be subject to authoritative exchanges and securities firms.
• Narrative like “A-share total market value exceeds 100 trillion yuan”: No authoritative statistical source has been found within the retrievable range to verify this specific number, so it is not taken as a factual argument and only regarded as part of market sentiment and expectation background.

• This round of AI hard tech market trend driven by DeepSeek and Cambricon, etc., is more reflected as “phased valuation repricing” and “style structural shift” rather than “fundamental paradigm shift” in A-share valuation logic. The three main lines supporting repricing (AI domestic replacement, policy and security premium, industry chain value migration to infrastructure) still hold, but sustainability depends on profit realization, policy consistency, and external environment evolution.

• Focus on targets with the trinity of “profit + order + industry position”: Prioritize companies with strong order visibility, continuous technological iteration, and reasonable valuation-performance ratio, rather than pure sentiment-driven concept speculation.
• Diversified allocation: Diversify into different links like chips, complete machines, optical communication, heat dissipation and liquid cooling, data center operation in hard tech and AI sectors; at the same time, retain allocation to high-dividend and defensive assets to reduce exposure to a single style.
• Dynamically track policies and exogenous variables: Pay attention to regulatory authorities’ industrial policy guidelines for AI computing power, fiscal and financial support intensity, and overseas technology and tariff dynamics.
• Disciplinary risk control: Be cautious of individual stocks with excessive short-term gains and disjointed valuation and fundamentals, and preset stop-loss and rebalancing points.

[0] Jinling API Data: Kweichow Moutai (600519.SS) real-time quotation (price 1402, market value ~1.76 trillion yuan, P/E ~19.55), Foxconn Industrial Internet (601138.SS) real-time quotation (price 65.24, market value ~1.30 trillion yuan, P/E ~42.36), statistics of U.S. three major indices in recent 60 days (S&P 500, Nasdaq, Dow Jones), Cambricon (688256.SH) quotation interface did not return data.
[1] Forbes – “What DeepSeek’s AI Innovation Means For Investors And Big Tech” (2025-01-29) https://www.forbes.com/sites/garthfriesen/2025/01/29/deepseeks-ai-innovation-what-it-means-for-investors-and-big-tech/
[2] Bloomberg – “China Tech Stocks Jump as AI Boom Pushes Index to Four-Year High” (2025-09-17) https://www.bloomberg.com/news/articles/2025-09-17/china-tech-stocks-surge-to-2021-level-as-investors-bet-on-ai
[3] Yahoo Finance (Hong Kong) – “Market Value Approaches Moutai! Foxconn Industrial Internet’s AI Servers Account for 70% of Global Market Share” (2025-12-31) https://hk.finance.yahoo.com/news/市值逼近茅台-工業富聯ai伺服器全球市佔七成-專家-不是代工廠-是新算力帝國-053004224.html
[4] Yahoo Finance (Hong Kong) – “Man Group Executive: Chinese Stocks Are One of the Most Certain Trades in 2025” (2025) https://hk.finance.yahoo.com/news/英仕曼高管-中國股票是2025年最確信的交易之-211836039.html
[5] Yahoo Finance (Hong Kong) – “Cambricon Turns Losses into Profits With DeepSeek’s Momentum, First Half Profit Hits Record” (2025) https://hk.finance.yahoo.com/news/寒武紀借deepseek東風扭虧為盈-上半年利潤創紀錄-024120523.html