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

CITIC Securities' research report points out that the departure of Jensen Huang and changes in the U.S. political landscape 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 the U.S. stock market 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 relatively limited, and the adjustment range of the hardware sector is controllable. The slowdown in the growth rate of AI capital expenditures is beneficial for improving the free cash flow situation of CSPs, and combined with the potential decline in long-term interest rates, the SaaS sector is expected to benefit. Regarding the U.S. stock market, the U.S. midterm elections and changes in technology company management may exacerbate short-term market volatility, but systemic selling pressure is relatively limited. As political risks are gradually digested, the pricing logic of the U.S. stock market 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 market's mid-term performance.