CITIC Securities: Changes in Technology Company Management May Intensify Market Volatility

CITIC Securities' research report points out that the departure of NVIDIA founder and CEO Jensen Huang, coupled with changes in the political landscape in the United States, may trigger a reevaluation of valuations in the AI industry chain and a rebalancing of the U.S. stock market style. However, the impact on the mid-term trend of U.S. stocks depends on the evolution of corporate earnings fundamentals. In the short term, the market may reprice the slowdown in AI capital expenditures and the downward revision of semiconductor companies' earnings expectations, but the inventory risk in the industry chain is limited, and the adjustment range in the hardware sector is controllable. The slowdown in the growth rate of AI capital expenditures is conducive to improving the free cash flow of CSPs, and combined with the potential decline in long-term interest rates, the SaaS sector is expected to benefit. Regarding U.S. stocks, the U.S. midterm elections and changes in technology company management may exacerbate short-term market volatility, but the systemic selling pressure is relatively limited. As political risks are gradually digested, the pricing logic of U.S. stocks may shift from being dominated by short-term risk sentiment to gradually returning to corporate earnings fundamentals, with earnings growth and upward revisions of earnings expectations likely to continue supporting the mid-term performance of the market.

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