Today's discussion focuses on two significant developments.

The first involves Alphabet, the parent company of Google, planning to raise $80 billion to support its AI capital expenditures. Notably, Berkshire Hathaway is making a substantial bet, investing $10 billion with a discount close to 8%.

Upon completion of this fundraising, Berkshire's position in Alphabet will increase to approximately $32 billion, placing it on par with its stake in Coca-Cola.

Warren Buffett has publicly stated on multiple occasions that he "knows nothing about AI" or "doesn't fully understand it." However, his successor, Greg Abel, has made significant moves since taking the helm, first selling oil and gas assets to invest in real estate, and now investing in Alphabet.

Berkshire has traditionally been cautious about heavy capital investments and generally avoided technology stocks. This substantial "all-in" bet on a single AI investment is seen as a powerful endorsement of the AI sector. Perhaps Abel harbors anxiety about missing the era.

Furthermore, Alphabet's fundraising activity reflects its aggressive expansion within the AI infrastructure cycle, further indicating its forecast for the AI market's potential and return prospects.

The second development is Nvidia CEO Jensen Huang publicly endorsing Marvell Technology, suggesting it could become the "next trillion-dollar company."

At the Computex conference, Huang shared the stage with Marvell CEO Matt Murphy. The consensus between the two CEOs is that the next decisive battleground for AI infrastructure is connectivity.

Is optical connectivity the next frontier after computing power and storage? This is worth watching.

Analysts point out that Marvell and Nvidia jointly outlined the immense market potential for AI optical interconnects over the next five to ten years, encompassing scale up, out, and across, ultimately achieving resource pooling of computing, memory, and network through optical interconnects.

Returning to the market, the three major A-share indices collectively rose today. At the close, the Shanghai Composite Index gained 0.43%, while the Shenzhen Component Index and the ChiNext Index rose 1.63% and 2.66%, respectively.

Market turnover was 2.81 trillion yuan, contracting by 83.7 billion yuan compared to the previous session.

Regarding the broader market, despite today's rebound, concerns about a continued correction persist. Technical concerns include the short-term moving averages on the daily K-line still forming a bearish alignment and the failure to break above the downtrend line established since mid-May.

It is suggested that, with lingering concerns about further adjustment, positions should not be overly heavy. Operationally, it's advisable to consider entering on significant individual stock pullbacks.

In terms of sectors, AI hardware and upstream semiconductors experienced a strong recovery today after two consecutive days of adjustment.

The communication equipment sector index surged 6.25%, hitting a record closing high. Components, semiconductors, and building materials (where companies producing electronic cloth hold significant weight) were among the top gainers.

North American AI supply chain stocks performed notably well, with key players seeing significant share price increases, and one company even reaching a new all-time high.

Analysts note that at this juncture, investors are concerned about how long the AI computing semiconductor rally can last. Drawing lessons from past sector cycles—such as the 2006-2007 cycle sector, the 2009-2010 consumer electronics sector, and the 2019-2021 liquor/new energy/semiconductor sectors—the most critical factor determining whether a rally ends is whether industry prosperity reaches an inflection point of slowdown.

Further analysis indicates that from this perspective, whether it's overseas computing power, domestic computing power, or semiconductor equipment, high prosperity is expected to continue into 2026, with domestic computing power and semiconductor equipment particularly showing accelerating improvement. Combined with studies of past cases, after each major industry theme experiences volatility, as the prosperity advantage becomes clearer, capital tends to focus further, leading to a steeper upward trajectory.

Other analysts point out that the current market may be in the early stages of a style shift, making a smooth, unilateral uptrend in the technology sector difficult to sustain. Against a backdrop of marginally tightening liquidity, overall sector volatility is amplifying, rotation is accelerating, and the difficulty of achieving excess returns has increased significantly. However, it is important to clarify that the high-growth AI industry trend has not ended; the technology sector will remain a main theme going forward.

Regarding AI hardware, it is believed the rally is not entirely over but will face periodic volatility. Some stocks will fall behind, while others will reach new highs.

The three categories of sectors that performed strongly yesterday—low-priced, defensive, and traditional—underwent significant divergence today, with most adjusting downward.

In the AI application direction, sectors like cultural & educational leisure, media & entertainment, and internet saw their indices fall below yesterday's lows. Defensive sectors such as agriculture, forestry, animal husbandry & fishing, pharmaceuticals, transportation equipment, and healthcare also saw their indices drop below yesterday's lows.

Yesterday, the rebound in these three categories did not lift the broader indices. Today, the strong recovery in AI hardware and the adjustment in those categories coincided with a market rise. This clearly illustrates that index strength is closely tied to, or "bound" to, AI hardware performance, unless there is a complete market style shift.

The securities sector saw a brief surge in the afternoon. Over the past nine trading sessions, the securities sector has shown multiple unusual movements. While related to market attempts at style rotation, these repeated movements suggest the sector may be in a bottoming area.

During the 2019-2021 structural bull market, the securities sector experienced two major upward waves, with the final one occurring in the middle-to-late stages. Learning from this, if the market enters a middle-to-late stage, the securities sector might launch another wave.

However, although the securities sector may be in a bottoming area, a clear initiation signal has not yet appeared and requires continued observation.

On the news front, a securities firm announced plans to acquire an 83.68% stake in another securities company for approximately 11.519 billion yuan.

The non-ferrous metals sector rebounded today, with copper and tin-related stocks performing well, partly due to news catalysts.

Reports indicate a resurgence in copper buying in the US, with analysts noting a tenfold increase in the copper supply deficit outside the US. Additionally, tin prices have risen about 40% over the past six months.

The Hang Seng Tech Index rose significantly today, with major constituents like JD.com, Alibaba, Meituan, and Tencent Holdings posting substantial gains.

The Hang Seng Tech Index has been weak over the past six months, partly due to the underperformance of these heavyweight stocks. As these companies largely have food delivery businesses, some investors once jokingly referred to it as the "food delivery index," with the ongoing delivery competition dampening market expectations.

Now that the delivery competition has subsided, one unfavorable factor has been removed. Whether a sustained rally can emerge in the future depends largely on the extent to which these companies are reshaped by AI.

Looking at today's news highlights:

1. The State Council recently issued a plan to accelerate agricultural and rural modernization during the 15th Five-Year Plan period. The plan proposes major projects and actions including diversified food development, "AI+" agriculture, upgrading the agricultural product processing industry, and improving rural living conditions, and mentions deepening the implementation of the seed industry revitalization action.

2. The Shanghai Municipal Government issued a notice on several opinions to deepen the construction of Shanghai as a global asset management center. The opinions propose accelerating the launch of liquefied natural gas futures and options, and preparing for the research and development of electricity futures and computing power futures.

3. Intel's CEO stated that with the rapid adoption of Agentic AI, data center demand for CPUs is expected to re-enter a growth cycle.

4. SK Hynix plans to double its memory production capacity over the next five years, with shortages expected to persist until 2030.

5. Tencent Cloud reduced prices for its DeepSeek-V4 series models, with maximum discounts reaching 97.5%.

In conclusion, the market today saw a recovery from the adjustments of the past two days, with the main theme of AI hardware showing significant repair strength. As signals for the end of this corrective phase have not yet emerged, it remains advisable to avoid overly heavy positions.

Regarding sectors, continue to focus on the three major industrial chains: optical communication, PCBs, and MLCCs, but preferably consider entering on significant individual stock pullbacks. In the coming period, monitor whether the securities sector shows initiation signals.

In accordance with the latest regulations from relevant state departments, this commentary does not involve any operational recommendations. Market entry risks are borne by the individual.