CITIC Securities says current AI and technology-sector trading is very stretched
but not yet at historical extremes. The firm attributes the rally to pronounce
macro divergence between new and old domestic drivers across investment,
production and profits—traditional demand is weakening while AI-related activity
is expanding. Similar divergence exists abroad: the US is the epicenter of AI
spending and demand, while South Korea is capturing outsized hardware profits;
global AI expansion is lifting demand for China’s AI-related products. CITIC’s
calculations show this episode differs from four prior concentrated rallies by a
stronger macro fundamental split. Because much of China’s production, exports
and trading momentum reflects overseas spillovers, the report flags near-term
market risks from the persistence of external macro divergence, the degree to
which profit expectations are realized, and whether corporate expansion is
funded by internal cash rather than debt; over the medium term it highlights the
potential for further Chinese AI capex to raise its contribution to GDP growth.
