Source: Caixin.
Author: Xiaoxiang. In 23, the company's overall sales volume was 18,000 kiloliters, with a YoY increase of 28.10%, showing significant growth. In terms of product structure, the operating income of products worth 10-30 billion yuan was 401/1288/60 million yuan, respectively.

Warren Buffett once said, "It's only when the tide goes out that you learn who's been swimming naked." And now, as the wave of AI begins to recede, people can't help but notice that there are quite a few "naked swimmers" in the technology industry.

Industry insiders' recent analysis of the second quarter financial reports shows that the enthusiasm for artificial intelligence actually masks the weak performance of most technology companies. Since 2022, after the performance slowed down, many companies have "still been in decline".

In the past year and a half.$NVIDIA (NVDA.US)$And.$Microsoft (MSFT.US)$Large companies expected to be early beneficiaries of artificial intelligence have seen a substantial increase in stock prices, helping people erase the terrible memories of 2022, when tech stocks dominated.$Nasdaq Composite Index (.IXIC.US)$However, beneath the surface, many tech companies that have not focused on artificial intelligence have actually struggled to regain momentum.

Tony Kim, investment director of BlackRock's Fundamental Equities division, said that when you look at the areas of technology outside of artificial intelligence, you will find that they have not made much progress. Many (sub)industries are still in decline. The only sector that is truly growing is artificial intelligence.

Beneath the surface of the AI wave

For example, software, IT consulting, and the more traditional technology fields such as the production of electronic devices for the manufacturing and automotive industries, are still facing challenges, including weak demand, and the aftermath of overexpansion and inventory accumulation during the COVID-19 pandemic.

Some companies are even suffering from the negative impact of the AI wave, as clients with limited budgets have readjusted their investment focus.

Dustin Moskovitz, co-founder of Facebook and current CEO, summarized the situation of many companies last week. The commercial software group has reduced its performance forecast for the second half of this year. Moskovitz said, 'What we see in the tech industry is still the lingering effects of over-hiring and overspending in the early stages of the pandemic. I think all of this is related to the huge uncertainty in the economic environment. And, how artificial intelligence will develop.'$Asana (ASAN.US)$In fact, the weakness of technology companies in small-cap stock indices is even more pronounced, as the boom in large technology stocks has brought little boost to small technology stocks. According to LSEG's data,

Recent financial reports show that the growth rate of most large tech companies is slower than in the past, while many smaller tech companies are actively downsizing.

Industry data shows that the average revenue growth of companies in the S&P 500 Information Technology Index over the past 12 months has only increased by 6.9%, compared to an average growth rate of 10% over the past five years. About three-quarters of companies are growing at a slower pace than the recent average. Over the past 12 months, the average earnings per share growth of the index's constituent companies was 16%, lower than the 21% growth over the past five years.

小盘股指数中科技企业的疲软迹象甚至要更为明显，因为大型科技股的风生水起几乎没有给小型科技股带来任何提振。$Russell 2000 Index (.RUT.US)$In the second quarter, technology stocks were the second worst-performing sector in terms of revenue growth: revenue declined by 6.1% year-on-year, and profits declined by 2.8% year-on-year.

Ted Mortonson, a technology industry strategist at RW Baird, said that artificial intelligence-generated content (AIGC) is masking the cyclical downturns in many other core industries.

Even in sub-sectors such as semiconductors that are attracted by the enthusiasm for artificial intelligence, some business lines are struggling. For example, Brice Hill, CFO of Applied Materials, a traditional chip equipment supplier, said last month, "We see particularly strong traction in artificial intelligence and data center computing, but the automotive and industrial end markets are facing weakness."

John Barr, portfolio manager at Needham Funds, also pointed out that the situation is similar in the industrial sector. He has invested in several semiconductor companies, including Applied Materials. "The current growth momentum is not very good, so we are looking for companies that have stable business and are positioning themselves for new things."

Can there be a 'small cap' phenomenon?

It is worth mentioning that since early summer, some investors' enthusiasm for AI-focused companies has waned, leading many analysts to predict that investors' attention will gradually shift from large tech stocks to finance and industrial sectors, which may bring some comfort to struggling companies in the tech industry in recent years.

Some experts in the tech industry hope to see a 'small cap' phenomenon within the tech industry, similar to the market rotation this summer, shifting from the largest AI stocks to previously overlooked corners of the industry.

While few companies can achieve triple-digit growth like Nvidia in the recent quarters, there are indeed signs that the worst-performing sectors in the tech industry are turning around.

In response to this, Tony Wang, portfolio manager of the T Rowe Price Technology Fund, said, 'I think we are seeing a stable trend: in sectors that are sensitive to the macroeconomy, the situation is no longer deteriorating, and a rate cut would be helpful.'

'I think that over the past two years, people have always seen AI as the only technology worth investing in. But I'm not sure if things will be the same in the next two years.'

Editor/rice