On March 17, $NVIDIA (NVDA.US)$ The annual GTC conference (GPU Technology Conference) opens on March 19. $TENCENT (00700.HK)$ The release of the 2024 Earnings Reports, as well as the debut of the first smartphone equipped with the native HarmonyOS official version, represent a series of major events in AI technology that will attract investors' attention.

HSBC Global's latest research indicates that compared to the valuations of US Technology Stocks, domestic technology stocks have a 51% discount in valuation, suggesting further upside potential. Multiple domestic Institutional investors emphasize that global funds are shifting from reconfiguring investments in China to heavy allocations in China. What’s even more important now is to find companies that truly benefit from the current wave of AI. Other distractions are merely minor episodes on the way to creating new highs.

Major tech events are ongoing.

As a benchmark conference in the global AI computing power field, NVIDIA's GTC conference has always been a barometer of technological innovation. This year's NVIDIA annual GTC conference will open on March 17, expecting more than 1,000 speeches and over 300 live demonstrations, covering fields such as Semiconductor chips, humanoid robots, Cybersecurity, Medical, and autonomous driving.

NVIDIA's hardware updates will be a major highlight of this GTC conference. The market anticipates that NVIDIA will launch the new generation of chips, Blackwell Ultra GB300 and B300 series. At that time, NVIDIA CEO Jensen Huang will deliver the annual keynote speech focusing on three major directions: AI agents, robotics technology, and accelerated computing. Leading domestic AI companies like ByteDance and Alibaba Cloud will also share cutting-edge progress in the field of large language models during China AI Day.

In addition, on March 19, TENCENT will release its 2024 Earnings Reports, and its 2025 CAPEX (capital expenditure) planning in the AI field is worth looking forward to. That week, the first domestic smartphone equipped with the native HarmonyOS stable version will be launched, with over 0.02 million native HarmonyOS applications and services available. The native HarmonyOS stable version enhances edge AI capabilities.

This series of major technological events emerge under the global trend of All IN AI, where hardware, Software, computing power, chips, and Communications will all welcome updates and developments. Sun Jiandong, executive director and investment director of private equity firm Peking Hongdao Investment, believes that the prices of high-quality Chinese Assets' stocks are generally in the later stage of the first half of the market, and the stock price can not only create historical highs but also have room and time for further increases above those highs.

Sun Jiandong pointed out that the fundamental driving force behind the current domestic market trend is the global capital’s correction of the extreme allocation between China and the USA in the past few years. For technology investments in the next ten to twenty years, global capital needs to bet on both China and the USA simultaneously. For China's high-quality technology assets, the mainline of this trend can be summarized as follows: global capital shifts from heavily allocating to China to strongly allocating to China: the first half is the reallocation to China; the second half is the heavy allocation to China. The first half resolves the entry issue, while the second half reflects how much to enter.

The direction of the domestic technology industry is becoming clearer.

Will the continuous adjustment of the American technology sector represented by NVIDIA have a negative impact on domestic technology stocks? This round of decline in the U.S. stock market began mainly in late February, from February's peak to now. $Nasdaq Composite Index (.IXIC.US)$ and$S&P 500 Index (.SPX.US)$They fell by nearly 12% and 8% respectively.

In this regard, HSBC Global's latest research indicates that since the launch of ChatGPT 4 in May 2023, the P/E growth rate (PEG) valuation of large Internet stocks in the USA has risen by 78%, from 1.2 times to 2.1 times. Even after recent adjustments, it remains at 1.6 times. The valuation of large Internet stocks in China has only increased from 0.8 times to 1 time. Based on the PE ratio, large Chinese Internet stocks are still offered at a 51% discount compared to their US peers, which is higher than the ten-year average of 28%, hence there is still room for growth in large Chinese Internet stocks.

Private equity firm Xuan Yuan Investment stated that they continue to maintain allocations in sectors such as smart driving, ARVR, and AI Infrastructure in China that have fundamental catalysts within the year. At the same time, they will appropriately participate in themes related to Solid State Batteries, Siasun Robot&Automation control, and electronic sensory skin technology branches. Xuan Yuan Investment believes that, "Currently, it is still a market driven by structural molecular upgrades, as the CAPEX expenditure disclosures of several major Internet companies turn anticipated performance into reality, benefiting the narrative shift from thematic styles to growth styles."

Statistics show that from last week's industry themes, semiconductor chips and Siasun Robot&Automation related ETFs are favored by funds, with significant inflows. Among them, the largest Siasun Robot&Automation ETF (562500) saw a weekly increase of 1.465 billion shares, achieving a net inflow of 0.596 billion yuan on the highest single day of that week, with the latest scale reaching 12.5 billion yuan.

What impact does the overall pullback of US tech stocks have on the domestic market?

Zhu Que Fund believes that the true explosive period for AI has yet to come. In the context of stable domestic economic expectations, it is more important now to identify companies that truly benefit from this wave of AI, genuinely serve this wave of AI, and can sustain revenue and profit growth while having a promising market cap outlook. Although the market may be subject to various fluctuations, industry trends may not be—similar to US tech companies over the past two years, which also faced disruptions from inflation and interest rates, but these were just minor interludes on the way to new highs. Rather than waiting for everything to become clear, it is better to gradually lay out amidst the fluctuations and move alongside the era's technological revolution.

Editor/rice